Directors only tax-saving package

1. Salaries

1.1. A director’s perspective

1.2. Minimum salary, the NMW and the NLW

1.2.1. Minimum salary

1.2.2. An NMW or NLW salary

1.2.3. Recording the salary

1.3. Salary waiver

1.4. Spouse’s/family members’ salary

1.5. Year-end bonus

1.6. National Insurance employment allowance

1.7. Key points

2. Benefits and expenses

2.1. A director’s perspective

2.2. Tax relief for the company

2.3. School fees

2.3.1. Paid for by your company

2.3.2. Grandparent schemes

2.3.3. Buy-to-let scheme

2.4. Moving home

2.5. Cheap-rate or interest-free loans

2.5.1. Loans under £10,000

2.5.2. Interest on loans over £10,000

2.5.3. Fixing the interest calculation

2.6. More than one company car

2.6.1. For a dependant

2.6.2. Classic cars

2.7. Is a van cheaper?

2.8. Computers and other IT equipment

2.9. Childcare vouchers

2.10. Travel and subsistence costs

2.11. Trivial and minor benefits

2.12. Key points

3. Dividends and distributions

3.1. A director’s and shareholder’s perspective

3.2. Timing payments of dividends

3.3. Dividend waivers

3.4. Separate classes of shares

3.5. Dividend income for a spouse or partner

3.6. Dividend income for children

3.7. Key points

4. Pension scheme strategies

4.1. The director’s perspective

4.2. The tax-advantaged pension scheme

4.3. Corporation tax relief for your company

4.4. Salary sacrifice option

4.5. Contribution without earnings

4.6. Ownership of the company’s assets

4.6.1. Your company’s premises

4.6.2. Buying equipment

4.7. Pension fund borrowings summary

4.8. Contribution for a spouse

4.9. Key points

5. Financing the company

5.1. The director’s perspective

5.2. Claiming interest on loans to buy shares

5.3. Company borrows to acquire assets for your use

5.4. Interest on shareholder loans to the company

5.5. Seed enterprise investment scheme

5.6. Key points

6. Capital allowances

6.1. A director’s perspective

6.2. Timing

6.3. Assets specifically qualifying for a 100% tax deduction

6.3.1. Cars

6.3.2. Capital allowances super deduction

6.4. Key points

7. Buying another company

7.1. The director’s perspective

7.2. Assets or shares?

7.3. Allocation of purchase consideration

7.4. Hive-downs

7.5. Tax due diligence

7.6. Insist on a tax indemnity

7.7. Losses

7.8. Borrowing costs

7.9. Stamp duty

7.10. VAT

7.11. Buy-to-sell shares

7.12. Termination payments

7.13. Deferred consideration

7.14. Key points

8. Reorganising share ownership

8.1. The director’s perspective

8.2. Gifts of shares to spouse

8.3. Gifts of shares to family members, employees, etc. 

8.4. Gift holdover relief

8.5. Preventing unnecessary employment tax charges

8.6. Purchase own shares

8.6.1. Phased share buy-back

8.6.2. Funding a buy-back

8.7. Key points

9. Succession planning

9.1. The director’s perspective

9.2. Preserving business property relief

9.2.1. Avoiding the investment tag

9.2.2. Excepted assets

9.3. Passing shares to the next generation

9.3.1. Lifetime transfers

9.3.2. Value freezing schemes

9.3.3. Passing shares on death

9.3.4. Planning points for your will

9.3.5. Avoiding a binding contract

9.4. Pre-owned assets tax (POAT)

9.5. Business premises personally owned

9.6. Key points

10. Selling your company

10.1. The director’s perspective

10.2. Timing

10.3. Sale of assets and trade

10.3.1. Double tax charge

10.3.2. Apportionment of sale consideration

10.3.3. Hive downs

10.3.4. VAT

10.3.5. Selling part of your company’s business

10.4. Sale of shares

10.4.1. Pre-sale tax planning strategies

10.4.2. Pre-sale dividend

10.4.3. Termination payments

10.4.4. Special pension contributions

10.4.5. Inter-spousal transfers

10.4.6. Pre-sale transfers and using family trusts

10.4.7. Becoming non-resident

10.4.8. Use offshore companies/trusts?

10.4.9. Deferred consideration

10.4.10 Using a profit warranty

10.5. IHT

10.6. Warranties and indemnities

10.7. Anti-avoidance

10.8. Key points

11. Winding up your company

11.1. The director’s perspective

11.2. Capital distribution

11.3. Availability business asset disposal relief

11.4. Last minute dividend?

11.5. Phoenix companies

11.6. Key points

12. Going offshore

12.1. The director’s perspective

12.2. Your own offshore accounts/assets

12.2.1. Offshore myths

12.2.2. An “old” undisclosed account

12.2.3. Error on last year’s return?

12.3. Your company’s offshore interests

12.3.1. Company invests offshore - safely

12.3.2. An offshore company

12.3.3. Offshore property company

12.4. Costs and compliance

12.5. Offshore jurisdictions

12.6. When selling your UK company

12.6.1. Use offshore companies/trusts?

12.6.2. Becoming non-resident

12.10. Key points

13. Trusts

13.1. The director’s perspective

13.2. The trusts tax regime

13.3. Use of trusts

13.4. Tax implications of creating a trust

13.5. Types of trust

13.5.1. Bare (or simple) trusts

13.5.2. Interest in possession (IIP) trusts

13.5.3. Discretionary trusts

13.6. Key points

14. Income tax planning

14.1. Introduction

14.2. What’s tax free?

14.3. Getting your allowances

14.4. Avoiding the high income child benefit tax charge

14.5. Children’s income

14.6. Overseas income and offshore bonds

14.7. Independent taxation

15. Capital gains tax planning

15.1. Introduction

15.2. What capital gains are not taxable?

15.3. How does capital gains tax work?

15.4. Business asset disposal relief (previously entrepreneurs’ relief)

15.5. Losses and gains

15.6. How to avoid the bed and breakfasting rules

15.7. Switching relief between homes

15.8. Selling your garden

15.9. CGT and death

15.10. Further timing issues

15.11. Enterprise investment scheme (EIS) and holdover (deferral) schemes

15.12. Seed enterprise investment scheme (SEIS)

15.12.1. SEIS tax breaks

15.12.2. Conditions to qualify for SEIS

16. Inheritance tax planning

16.1. Introduction

16.2. What is tax free?

16.3. The nil rate band

16.3.1. Spousal exemption

16.3.2. The residence nil rate band in more detail

16.4. The seven-year rule and taper relief

16.5. Gifts with reservation

16.6. Keeping value outside your estate

16.7. Skipping a generation

16.8. Two nil rate bands for spouses

16.9. Properly drafted wills

16.10. Changing someone’s will after they have died

16.11. The use of trusts

16.11.1. Pension benefits and trusts

16.12. Reduce your IHT bill by giving to charity

17. National Insurance planning

18. Year-end tax planning

19. Appendix

The Scottish tax rates

Chapter 1 - HMRC online services

1. How to sign up to HMRC online services for the first time

1.1. Where do you start?

1.2. Completing HMRC online registration and enrolment

1.3. Starting to use HMRC services for the first time

1.4. Signing in

2. How to obtain a new activation code for HMRC’s online services

2.1. What are activation codes?

2.2. Lost or expired activation code

2.3. Obtain a new activation code

2.4. Timing

3. How to add a new HMRC online service to your company’s registration

3.1. Procedure for adding services

3.2. Timing

4. How to sign up and use HMRC’s Business Tax Account

4.1. Who can use HMRC’s Business Tax Account?

4.2. Timing

Chapter 2 - Dividends, salary, benefits and employment expenses

1. How to pay a director’s bonus

1.1. Bonus procedure

1.2. Tax position

1.3. Timing

2. How to claim a tax deduction for business expenses

2.1. Who can claim?

2.2. Method

2.3. Timing

3. How to elect for the alternative method of calculation of a beneficial loan

3.1. Election for the precise method

3.2. HMRC override

3.3. Timing

4. How to create a salary sacrifice arrangement

4.1. Procedure

4.2. Timing

4.3. HMRC clearance

5. How to keep a mileage record

5.1. Recommended information to include

5.2. Other information that would be useful

6. How to pay an interim dividend

6.1. Procedure

6.2. When is an interim dividend paid for tax purposes?

6.3. Timing

7. How to pay a final dividend

7.1. Procedure

7.2. When is a final dividend paid for tax purposes?

7.3. Timing

8. How to waive a dividend

8.1. Procedure for waiving

8.2. Tax consequences

8.3. Timing

9. How to report a beneficial loan for directors and employees

9.1. Reporting requirements

9.2. What to report

9.3. Timing

Chapter 3 - PAYE and payroll and construction industry schemes

1. How to register your company as an employer for PAYE

1.1. Registration process

1.2. Information needed

1.3. Timing

2. How to register as a CIS contractor

2.1. Registration procedure

2.2. Timing

3. How to set up PAYE basic tools

3.1. Procedure to download and set-up

3.2. Timing

4. How to set up a new employee without a P45

4.1. Procedure

4.2. Timing

5. How to set up a new employee with a P45

5.1. Procedure

5.2. Timing

6. How to make an RTI report without an NI number

6.1. Procedure if you don’t know an NI number

6.2. Timing

7. How to make PAYE, CIS and NI deductions

7.1. When is this payable to HMRC?

7.2. Payment procedure

7.3. Timing

8. How to pay HMRC advisory benchmark allowances for UK subsistence

8.1. Procedure

8.2. Who can use benchmark expenses rates?

8.3. Are declarations required for HMRC?

8.4. Timing

9. How to pay scale rate expenses for overseas travel and subsistence

9.1. What’s the procedure?

9.2. Who can use scale rate expenses?

9.3. What evidence do employees need to produce?

9.4. Do scale expenses have to be entered on P11Ds?

9.5. How do you calculate how much you can pay?

9.6. Timing

10. How to pay personal incidental overnight expenses relating to business travel

10.1. Reimbursing incidental expenses

10.2. Records

10.3. Reporting

10.4. Timing

11. How to make a tax and NI-free advance of expenses

11.1. Procedure and conditions

11.2. Timing

12. How to pay HMRC’s approved flat rate use-of-home allowance

12.1. Conditions and procedure

12.2. Timing

13. How to report expenses and benefits for directors and Pay Class 1A NI

13.1. Reporting procedure

13.2. Declaration and Class 1A report

13.3. Timing

14. How to reclaim overpaid NI

14.1. Claim or checking procedure

14.2. Timing

15. How to apply the annual earnings period for directors

15.1. Calculation procedure

15.2. The standard annual earnings period

15.3. The alternative method

15.4. RTI requirements

15.5. Timing

Chapter 4 - VAT

1. How to register for VAT online

1.1. Registration options

1.2. Timing

2. How to register for VAT offline

2.1. Registration process

2.2. Timing

3. How to update your company’s VAT records with HMRC

3.1. Notification options

3.2. Timing

4. How to change your company’s VAT status

4.1. Change of legal entity

4.2. Timing

5. How to apply for group VAT registration

5.1. Application procedure

5.2. More information

5.3. Timing

6. How to apply for divisional VAT registration

6.1. Application procedure

6.2. More information

6.3. Timing

7. How to apply to use the VAT flat rate scheme

7.1. Application procedure

7.2. More information

7.3. Timing

8. How to opt out of the VAT flat rate scheme

8.1. Procedure to opt out

8.2. Timing

9. How to join the VAT cash accounting scheme

9.1. Procedure to join

9.2. Timing

10. How to use a VAT retail scheme

10.1. Joining a retail scheme

10.2. Leaving a retail scheme

10.3. Point of sale scheme

10.4. Apportionment schemes

10.5. Direct calculation schemes

10.6. Sector-specific schemes

10.7. Bespoke schemes

10.8. Timing

11. How to adopt the VAT annual accounting scheme

11.1. Procedure for opting

11.2. More information

11.3. Timing

12. How to adopt a special method for VAT partial exemption

12.1. Procedure

12.2. More information

12.3. Timing

13. How to opt to tax a property (make rent etc. liable to VAT)

13.1. Procedure

13.2. Timing

14. How to withdraw the option to tax

14.1. Procedure - within six months of making the option

14.2. Procedure - after the option has been in place for 20 years

14.3. Timing

15. How to use the VAT flat rate fuel charge

15.1. Applying the flat rate

15.2. Timing

Chapter 5 - Corporation tax

1. How to register a company with HMRC

1.1. Notification procedure

1.2. Timing

2. How to notify HMRC that your company is dormant

2.1. Notification procedure

2.2. Timing

3. How to notify HMRC that your company is active

3.1. Notification procedure

3.2. Timing

4. How to file company accounts with HMRC

4.1. Filing company accounts options

4.2. Before you can file corporation tax returns

4.3. Timing

5. How to amend a corporation tax return

5.1. Amendment procedure

5.2. Timing

6. How to claim trading losses against trading income in later years

6.1. Claim procedure

6.2. Timing

7. How to claim pre-incorporation losses against company income

7.1. Claim procedure

7.2. Timing

8. How to claim a deduction for pre-trading expenses

8.1. Procedure for claiming

8.2. Timing

9. How to claim trading losses against current year’s income

9.1. Claim procedure

9.2. Timing

10. How to claim trading losses against total income of earlier years

10.1. Claim procedure

10.2. Timing

11. How to claim losses when a business ceases - terminal loss relief

11.1. Claim procedure

11.2. Timing

12. How to claim group relief for losses

12.1. How to claim group relief

12.2. Timing

Chapter 6 - Capital allowances

1. How to make a short-life asset election

1.1. Conditions and procedure

1.2. Timing

2. How to claim the annual investment allowance (AIA)

2.1. Procedure

2.2. Timing

3. How to elect for capital allowances on equipment fixed to buildings

3.1. Procedure

3.2. Timing

4. How to elect to use tax written down values on transfer of a business

4.1. Procedure

4.2. Timing

Chapter 7 - Directors’ personal tax

1. How to register for self-assessment as a director

1.1. Registration process

1.2. What next?

1.3. Timing

2. How to amend your tax code

2.1. Timing

3. How to claim higher rate relief for pension contributions

3.1. Occupational pension scheme contributions

3.2. Personal pension plan contributions

3.3. Retirement annuity contracts

3.4. Timing

4. How to reduce your self-assessment payments on account

4.1. Procedure

4.2. Timing

5. How to claim an income tax refund

5.1. Claim process

5.2. How to get refunds repaid

5.3. Timing

6. How to claim tax relief for homeworking expenses

6.1. Procedure

6.2. Timing

7. How to claim interest on a business loan

7.1. Claiming the interest

7.2. Making a claim before the tax year has ended

7.3. Making a claim after the tax year has ended

7.4. Other conditions

7.5. Timing

8. How to defer Class 1 NI contributions

8.1. Deferment procedure

8.2. Information required

8.3. What happens next year?

8.4. Timing

9. How to use unused pensions tax allowance from earlier years

9.1. Claiming unused pensions allowance from earlier years

9.2. Timing

10. How to declare and pay a pensions annual allowance charge

10.1. Payment procedure

10.2. Calculating the charge

10.3. Timing

11. How to elect to be taxed on joint income

11.1. Procedure

11.2. Timing

12. How to claim enterprise investment scheme (EIS) relief

12.1. Procedure

12.2. Timing

13. How to carry back tax relief for the EIS

13.1. Procedure for EIS shares issued in 2022/23

13.2. Procedure for EIS shares issued in 2021/22

13.3. Timing

14. How to claim seed enterprise investment scheme (SEIS) relief

14.1. Procedure

14.2. Timing

15. How to carry back tax relief for the SEIS

15.1. Procedure for SEIS shares issued in 2022/23

15.2. Procedure for SEIS shares issued in 2021/22

15.3. Timing

Chapter 8 - Buying and selling a business

1. How to claim business asset disposal relief

1.1. Procedure for claiming relief

1.2. Timing

2. How to claim negligible value CGT relief for your company’s shares

2.1. What is a negligible value claim?

2.2. Who can claim?

2.3. What are the time limits?

2.4. Form of claim

2.5. Claim for an earlier year

2.6. Claim for current tax year

3. How to claim income tax relief for a capital loss

3.1. Procedure

3.2. Timing

4. How to elect for BADR to apply to qualifying corporate bonds

4.1. Procedure

4.2. Timing

5. How to defer (holdover) a capital gain on the transfer of shares in a company

5.1. Procedure

5.2. Timing

6. How to roll over a capital gain following the sale of business assets

6.1. Procedure

6.2. Timing

Chapter 9 - Other claims and procedures

1. How to create a loan agreement with a director

1.1. Procedure

1.2. Timing

2. How to challenge an HMRC assessment ruling or decision for direct tax

2.1. Appealing against a decision or assessment

2.2. Appeal procedure

2.3. How are appeals settled?

2.4. More information

2.5. Timing

3. How to challenge an HMRC assessment ruling or decision for indirect tax

3.1. Appealing against a decision or assessment

3.2. Alternative first step before making an appeal to the First-tier Tribunal

3.3. The review process

3.4. Important note

3.5. More information

3.6. Timing

4. How to complain about HMRC’s services

4.1. Complaints process

4.2. Adjudication

4.3. Parliamentary Ombudsman

4.4. Financial compensation

4.5. Timing

5. How to obtain clearance for a transaction from HMRC

5.1. Procedure

5.2. Timing

6. How to postpone payment of tax relating to an HMRC assessment or decision

6.1. Procedure

6.2. Timing

7. How to pay tax bills without a payslip

7.1. Corporation tax

7.2. Multiple payments by CHAPS

7.3. VAT

7.4. VAT MOSS

7.5. PAYE tax and NI payments

8. How to apply to use HMRC’s alternative dispute resolution (ADR) process

8.1. Who can use ADR?

8.2. Application process

8.3. Is ADR right for you?

8.4. Agreeing to the process

8.5. What effect does ADR have on your dispute with HMRC?

8.6. Timing

9. How to appeal to the First-tier Tribunal

9.1. To access the FTT

9.2. How do you present a case?

9.3. What documents should you have at a hearing?

9.4. Must you be represented?

9.5. Timing