On 17^th March 2020 the Government announced the delay (not cancelation) of the introduction of changes to IR35 (due to Covid-19).  This gives everyone some breathing space and time to understand the implications and your options of this important area of tax law. By planning ahead, you can ensure that you are compliant, save tax, and be ready for the changes well ahead of time. Many larger businesses are already following the rules as they are concerned about penalties being backdated. So, now is the time to get your house in order.

IR35 was first introduced in 2000 to ensure that contractors and freelancers, working through their limited companies, who are effectively deemed to be an employee, would pay broadly the same amount of tax as their PAYE colleagues.

Let’s review some important aspects of IR35 you need to know about and the tax implications: 

Basics

Despite the complexity of the IR35 rules, it is important to note that nearly all IR35 cases go back to the basic principles laid down in a 1968 tax case called ‘Ready Mix Concrete’. In the latest high-profile BBC cases, the Tribunal went through the three key principles of Mutuality of Obligations, Substitution and Control.

So the first thing to do before you throw in the towel and assume you are caught by IR35 is to test your working arrangements against these principles and ask yourself the following questions: Can I send in another person (substitute) to work on my behalf? Can I refuse to work and is my end client obliged to offer me work (mutuality of obligation) and what degree on control is exerted on how I do my work?

Enhanced CEST

HMRC has released an enhanced version of the CEST (Check Employment Status for Tax) tool

[https://www.gov.uk/guidance/check-employment-status-for-tax]

. It is understood that this tool has been rigorously tested against case law and settled cases by the taxman. HMRC promise to stand by the results produced by the tool provided the information entered is accurate.  So, if you’re not sure, simply take this test or engage a specialist tax adviser to provide you with formal tax advice on your situation.

Tax Implications

Assuming you’ve been properly advised that you’re caught by IR35 or the CEST tool suggest so and you are happy to accept that, then the general tax implication is that you are responsible for paying income tax and National Insurance contributions on an amount called deemed payment.

You will need to calculate this deemed payment on your limited company income for the year.

This means that you deduct your Pay As You Earn (PAYE) salary, a 5% expenses allowance, plus any pension contributions.

What’s left is then treated as if it were the gross cost to the employer (deemed payment). So, let’s say if you have £100,000 income, you pay £10,000 as salaries and pay £10,000 into pensions. And let’s say you’re eligible for the 5% expenses deduction. So, the deemed payment which you will need to apply income tax and NI on will be £75,000.

In practice, if you are certain your contract is caught by IR35, then the simplest solution is to pay out all of your limited company’s income less legitimate expenses and pension contributions as a PAYE salary.

Public Sector IR35

Originally, the responsibility for determining IR35 status was placed on the contractor and not the end client. But in 2017, the rules changed for those working with public sector clients (HMRC, NHS, the MOD and the like). Here the responsibility to prove self-employment status shifted from the contractors to the public sector client. Under this rule, where a contractor is caught by IR35, they will be taxed and pay NI as an employee. There is no 5% deduction for expenses under the general IR35 deemed payment tax calculation.

Private Sector IR35

One of the delayed IR35 changes is called the off-payroll working tax rules. These rules are aimed at big private organisations (see exemptions and further aspects below) and the idea is again to shift the burden of determining the employment status of contractors or workers from the contractor to the private organisation. So, in effect similar to the public sector rule but with some differences including the need for the private sector client to carry out an assessment of the employment status of the worker and provide a “Status Determination Statement” (SDS).

Under the new rules, the fees paid to the contractor, called the “direct deemed payment” are to be treated as employment income. This means PAYE and employees National Insurance is deducted from that direct deemed payment. Then the entity paying the contractor, which could be the agency or hirer, has to pay their employment taxes on top.

Exemptions

It is important to note that the new rules do not apply to all private sector end clients. Those clients qualifying as “small” will fall outside the scope of the new rules. The companies act definition of small company will be used for this purpose. Therefore where the private sector client does not have a turnover of more than £10.2m, balance sheet value of more than £5.1m and employees of more than 50 (remember any two of the three tests will suffice) then it does not have to assess the employment status of its workers.

So, for contractors who are worried about the new IR35 rules, finding out a bit more about your end client might prove a worthwhile exercise. You might decide to work with these “small” companies rather than large PLCs

What if HMRC “suspects” fraud?

With the private sector IR35, HMRC has recently announced that it will only use the information it gathers from the new rules to open an enquiry into earlier years if there is reason to suspect fraud or criminal activity. Whilst this will be welcome news for many contractors who are worried that a change in their status stipulated by their private sector client will lead to costly investigation, it is worth bearing in mind that the offence of fraud (or cheating the public revenue) is wide ranging and can catch behaviours including: Withholding PAYE/NI; and failing to disclose income.

In the context of IR35, it is not yet clear how HMRC will view a situation where PAYE/NI were not accounted for and where deemed payment income was not disclosed. With the complex rules around IR35, it is envisaged that a pragmatic approach will be adopted by HMRC.  

What happens if a limited company is no longer appropriate?

Unfortunately, it may turn out to be the case that many contractors find the new rules lead them to shut down their limited companies.

If this happens to you and you have cash in your company, then you need to start thinking about the tax efficient way of closing the company. It may well be that you can pay only 10% tax on the funds left in the company rather than high income tax rates. And whilst HMRC may argue that the existence of excess cash in your company means the 10% tax may not apply, do resist this argument and seek tax advice.   

As this is a complex area of tax law do take the time the delay gives you to understand as much as possible about IR35 and the coming changes. Get specialist tax advice and plan ahead.

Jonathan Amponsah CTA FCCA is an award winning chartered tax adviser and accountant. Jonathan is the founder and CEO of The Tax Guys.

www.thetaxguys.co.uk

If you want to improve your cash balance in the year ahead it’s a good idea to start by looking at your tax arrangements.  You may well be able to reduce the amount of tax you pay personally or for your business.

Let’s look at some areas that may be relevant for you in the year ahead.

It is good to start by getting your business structure right. Structuring your business for tax optimisation goes well beyond choosing between a limited company or a sole trader. You need to get this basic area right; have you thought of an LLP (limited liability partnership) or a group structure? There are many tax benefits with these two structures, and they are not just for professional firms or big corporates. Speak to a tax adviser or your accountant about these.

Then:

Have a Tax plan

Unless you plan to save tax this year, it’s unlikely to happen and you’re likely to pay more tax than necessary. Avoid retrospective tax planning and aggressive tax schemes – go through this article to see if there are areas you or your accountant have neglected. Despite what you may have heard, there are still plenty of legitimate ways to save tax and sleep well at night. Also, avoid leaving all your taxes till the last minute.

Claim this generous corporate tax relief

Normally when you incur a legitimate business expenses wholly and exclusively for the purpose of your trade, you get to claim 100% of these expenses against your business income to reduce your tax bill. But what if the tax rules allow you to claim a lot more than 100%? Say you get to claim £230 even though you’ve only physically spent £100?

Well that’s exactly what the Research and Development (R&D) tax relief allows you to do. So if you have a company in the creative, engineering, software or any innovative industry where you’re solving difficult problems for customers and raising the bar in your industry, please speak to your accountant or a specialist tax adviser about R&D tax relief before 31 March.

Many companies miss out of this valuable relief due to lack of awareness as well as the misconception that R&D is only available to big Laboratories and pharmaceutical industries.

Reward staff tax efficiently

When it comes to rewarding staff, consider approved share schemes and staff suggestion awards to encourage your staff to get involved and to reward them tax efficiently.

There are two kinds of staff awards:

• encouragement awards – for good suggestions, or to reward your employees for special effort
• financial benefit awards – for suggestions that will save or make your business money

Encouragement awards are tax free up to £25. But financial benefit awards are exempt up to £5,000. That’s right £5,000.

But before you go ahead and pay your staff tax free income, please note that as with all tax reliefs and tax exemptions, there are conditions to meet. Speak to your tax adviser first.

The other tax efficient reward schemes are the various share option schemes including EMI (Enterprise Management Incentive). Why is this tax efficient? Because when staff sell their shares, they pay 10% tax instead of 20, 30 or 40% if they meet the strict conditions. But again, please beware that these rules come with strings attached and always seek advice.

Save Income Tax by Using A Property Company

If you’re a landlord with a portfolio of properties in your name, you’re likely to be paying more tax via the self-assessment system because of the recent changes in property tax and, notably, the mortgage interest restriction. Companies are not affected by the mortgage interest restriction and they do pay lower rates of tax. However please do seek specialist tax advice because there are some tax traps to beware of before of proceed. 

Use £78,000 tax allowances first

At the heart of every sensible tax planning is the use and leverage of the tax-free allowances HMRC give us. Make the most of these allowances first as they get wasted if not used. And don’t forget about the allowances of your spouse and children. Did you know that if you add up the income tax allowance, capital gains tax allowance, savings allowance and dividends allowance, you get a whopping £26,000 plus allowances in the year? That’s just for starters. And if you have a spouse or a child who are not using their allowances, then that’s a potential tax-free income of £78,000 (26,000 x 3).

Claim This £4,800 Tax Savings

No one likes to talk about death. But it’s a reality. And very often people pay unnecessary inheritance tax by not claiming the right reliefs.

Gifts of up to £3,000 per year can be made free of Inheritance Tax. Unlike most of the tax allowances, the limit increases to £6,000 if the previous year’s annual exemption was not used. So you get to use last year’s allowance of £3,000. A married couple can therefore make Inheritance Tax exempt gifts including cash totalling £12,000 per tax year.

This simple planning can save a possible tax bill of £4,800 in the event of your demise.

Engage specialist tax advisers

Most business owners naturally turn to their accountants for all things tax. Accountancy and tax are two different professions, although there are many similarities.

However savvy entrepreneurs normally have both an accountant and a tax adviser. Because they know that accountants are like your GP, who is good and knows all the general rules, but tax advisers are like your surgeons, who are specialists in their field and know the exceptions to the rules. So whilst an accountant will rightly tell you that entertainment is not tax deductible, a tax adviser will usually lift the rocks and find you some exceptions to the general rule that allows you to claim the entertainment.

Embrace tax efficient pensions

Do think long term and make use of tax efficient retirement planning. So instead of merely contributing to a pension scheme (which you get tax relief for, by the way) and leaving the funds in there, why not consider vehicles like SSAS or SIPPS to help you leverage the funds and get a second bite of the tax cherry. These pension schemes, subject to certain rules, are then used to buy, say, a commercial property and the rental income gets additional tax benefits.

In summary

With some planning there are a wide range of ways in which you can lower your tax bills. Please note that as with all tax matters, always speak to a tax adviser first.  I hope your cash balance will improve in the year ahead.

ABOUT THE AUTHOR

Jonathan Amponsah CTA FCCA is an award winning chartered tax adviser and accountant who advises business owners on entrepreneurial tax reliefs. Jonathan is the founder and CEO of The Tax Guys.

www.thetaxguys.co.uk

New stricter rules around using contractors and consultants (known as IR35 come into effect from April 2020.  The aim is to stop consultants, contractors and freelancers being used as “disguised employees” to avoid paying tax and benefits.

Unlike employees on contracts, private sector businesses don’t currently have to use PAYE, pay National Insurance contributions, or offer any benefits, such as holiday or sick pay, to contractors.

However, some businesses have been accused of employing contractors in name only, essentially hiring an employee without paying the additional tax or benefits. Some contractors have also been accused of using their position as a sole trader or limited company to avoid income tax they would otherwise be liable to pay as an employee.

The IR35 rules would make employers directly responsible for their use of contractors as a tax-free way of staffing their business. If HMRC disagrees with their use of contractors, they could be liable for a hefty fine.

How to tell if consultants are IR35 compliant

A big issue for businesses is knowing whether a consultant can be classed as a contractor or whether they would be seen by HMRC as an employee. It can be incredibly useful to hire a consultant on a short-term basis to help with a particular challenge or project, but to hire someone as an employee for a short period is not very cost-effective.

When hiring consultants, it’s worth doing a check and preparing evidence just in case HMRC come knocking. Specifically:

• List ways in which consultants’ work differs from employees’ work. Employees are entitled to minimum hours, workplace pensions, and equipment provided. Note how many employee benefits consultants get and where they differ.

• Highlight working agreements and management arrangements. Consultants provide a service to a client; they aren’t directly managed by the client company. Keep a record of contractual agreements and make sure that correspondence doesn’t imply direct control of the consultant.

• Opt for limited companies with their own business presence. It can be very difficult to prove that a sole trader isn’t a disguised employee. A limited company that isn’t named after the individual consultant is a far safer option. If the limited company also has a website and other marketing material, it’s even easier to show that they are not a disguised employee.

• Check the consultant’s other clients. If a consultant receives work from a number of different companies and, therefore, has a diversified income, it will be far more obvious that they are a consultant and not an employee. Of course, it isn’t always easy for consultants to maintain a diverse client portfolio, with often irregular workloads from occasional clients. But, if a single company provides >90% of a consultant’s work, they are effectively their employer.

Even after completing all of these steps, there is still a risk when engaging a consultant. For larger, more visible companies, this can be a real concern and the stakes are high.

What can companies do to keep affordable consultants after the IR35 changes?

Three risk-free ways to engage consultants

The obvious risk-free way of engaging a consultant is to take them on as an employee on a fixed-term contract. However, this offers less flexibility for consultants and can be an incredibly expensive option.

Another option is to engage a large consultancy firm. These firms, however, tend to charge exorbitant rates for junior consultants who are managed by more experienced consultants.

If companies want to continue using affordable consultancy without the IR35 risk, there are broadly three avenues to explore:

1. Boutique consultancies

Perhaps in response to the IR35 rules, there has been a marked increase in the number of small, boutique consultancies opening up in the UK. These consultancies tend to focus on one specific area of business, directly employing their own consultants.

The main benefits of these small consultancies are that they are much cheaper than larger consultancies, often supply only experienced consultants, and are easier to hold to account than individual contractors. As such, they can represent good value for money.

Of course, all agencies will add their own fees to cover overheads and grow their profits, so they can never compete with the cost-effectiveness of an individual contractor. Since boutique agencies also tend to specialise, additional consultancies may be required to solve every challenge, which can be both time-consuming and expensive.

Can you change point number 2 to Umbrella/PAYE. Some companies will pay directly the contractor through PAYE. This is even worse than an Umbrella company for a contractor, because it offers even less flexibility for contractors to deduct some of their expenses or to use ‘salary sacrifice’ to contribute ‘pre-taxed’ income to a pension.

2. Umbrella companies/PAYE

The most common way that companies are using to dodge the IR35 risk is to use ‘umbrella companies’. These are separate companies that collect the contractor’s earnings and pay the contractor after deducting National Insurance and tax contributions. While this option is mitigating the IR35 risk for companies, contractors will have to pay more tax and National Insurance, but still keeps the same risks and additional tasks that come with contracting (find their own work, deal with clients, manage their own admin and accept insecure working arrangements).

But things can get even worse for a contractor if a company decides to pay them directly on the PAYE basis. This is an even less appealing option for contractors  than an Umbrella company, as it negates any expenses or the use of ‘salary sacrifice’ to contribute ‘pre-taxed’ income to a pension.

As a result, top consultants will move on to other “outside IR35” arrangements as soon as possible, making umbrella companies and PAYE contracts only a short-term stop-gap rather than a long-term solution.

3. Consultant expert networks

An alternative to engaging expensive consultant companies as middlemen is to use expert networks. These networks seek to attract top consultants as needed. Consultants still work on a contractual or freelance basis, thereby attracting top talent, yet the platform itself helps distinguish the consultant as a contractor and not an employee.

Expert network consultants will almost undoubtedly have several clients over the course of a tax year, demonstrating that they are, indeed, a consultant. And since most are paid on an hourly basis, they are even more clearly demarcated as a consultant rather than an employee.

As new technology has matured, expert networks are transforming into platforms, such as Consulthon, where companies can directly review and engage with consultants, improving results while remaining IR35 compliant. Companies can post their challenge on a consultancy platform, review responses from experienced consultants, and choose the expert advice that they feel works best.

If they need more information, they can liaise directly with the consultant over the phone or even in person, for a predictable hourly fee.

The only downside of this approach is that the company must take full responsibility for choosing the approach and implementing the solution. They are essentially paying for advice rather than hands-on work. While this helps demonstrate that the consultant is not, in fact, an employee, companies must have the in-house skills to implement the solution.

Consultants are an important and incredibly useful resource for many companies, especially young businesses with specific growth challenges. Tapping into an expert resource with potentially decades of experience saves time, money and resource in the long-run while helping to overcome specific, short-term challenges.

While IR35 does threaten the affordability and sustainability of using consultants, it does NOT mean a dramatic end to contractual work! Consultants can still be used on a contractual basis but companies will need to put more thought into the process of engaging consultants and contractors – whether it be via a boutique agency, through an umbrella company, or through a consultancy platform.

ABOUT THE AUTHOR

Mirel Baila is co-founder of Consulthon, a UK Management Consulting Expert Network. Businesses can raise a Business Challenge and the network’s experts will brainstorm solutions. After selecting the answer they like the most, the business can book a paid one-hour advisory call and deep-dive session with that consultant. All the consultants are vetted by Consulthon and the platform offers businesses access to a wide range of skills, in a variety of sectors and countries.

Web: https://consulthon.com/

LinkedIn: https://www.linkedin.com/company/consulthon/

Facebook: https://www.facebook.com/CONSULTHON.CO.UK/

Twitter:  https://twitter.com/CONSULTHON  @consulthon

Instagram: https://www.instagram.com/consulthon.co.uk/ @consulthon.co.uk

If you own a small business it’s easy to get caught up in doing bookkeeping yourself to try and save costs. However, when you have lot to do this can eat into your free time, and it’s probably not your favourite way to spend your weekends.

So how do you strike a balance and prepare your books correctly in order to reduce your accountancy bills, without it eating into your weekends?

Here some way to save time and money:

1. Talk to your accountant

Ask your accountant what you can do to lower your accountancy fees. The aim is not to take on more work at the expense of your weekends or family life. Most accountants do offer packages and it might be that you can get the year-end accounts and tax return work at half price. Or they could simply take over all your paperwork chores, produce regular management accounts and handle your VAT and payroll requirements. In return you get your end of year accounts done and filed for FREE. If the bulk of the work is completed and there are no additional complications or work at the year end, I see no reason why the accounts cannot be filed at no cost to you. 

• Get a format agreed

If you’re happy to do the books, then agree the format with your accountant. For example, should you to simply keep record of income and expenses on excel? Do they want you to use a particular software? Do they want you to reconcile the books by applying “Double Entry” bookkeeping? Unless you are a professional bookkeeper or a member of the Institute of Certified Bookkeepers, please do not attempt double entry bookkeeping. You may end up paying for the accountant to rectify errors. You may even end up with some tax issues.

• Use bookkeeping services

You can use a professional bookkeeper to prepare the books. Fees will be lower than an accountant’s. Shortlist a few and involve your accountant in the process if possible. You want to avoid a situation where you pay for the same work twice because the format and quality of the bookkeeping is not at a level to enable the accountant to produce the accounts at a cheaper rate. Or the bookkeeper and the accountants use different systems.

• Make records as simple and streamlined as you can

Whether you use an accountant, a bookkeeper or do it yourself, avoid complicated record keeping and streamline your transactions. Things you can do include having a dedicated business account, using the bank for most transactions, avoid using the business bank account for personal expenses, avoid multiple bank accounts or credit cards and have all your records in once place (preferably in a digital format).

• Use Receipt Capture System

There are some good apps including Auto Entry and Receipt Bank that allow you to capture these receipts on the go and send them directly to your accountant. You can even ask your suppliers to send their invoices to the app to free up your inbox a bit.

• Use Cloud Bookkeeping

FreeAgent, QuickBooks, Xero and the like, have transformed how bookkeeping is done. If you do it yourself use one of these platforms to save time and accountancy fees. Some accountancy firms may even cover the cost within their packaged services. Again, agree with your accountant where your bookkeeping duties would end.

• Use automation where you can

You can now authorise your bank to send bank transaction to a cloud bookkeeping platform. You can also set a rule to say that if a direct debit payment goes to, say Aviva, then this should be analysed as insurance. Imagine how much time and fees you can save by doing this.  However, don’t assume everything will be correct. It will need checking.

• Pick a good time to send in your records

Did you know you can ask for a lower accountancy fee if you prepare your books for your accountants at their quietest times? Accountants have peak times as many businesses have December & March year-ends, plus the Tax Return deadline in January. Avoid these times and ask your accountant if you’ll get a discount if you send in your books before the rush.

• EPOS integration

If you run a retail or restaurant business and you’re using a cloud bookkeeping platform, then why not go a step further and get an EPOS (Electronic Point of Sale) and inventory system that integrates with your chosen cloud platform and helps you keep track of stock? Platforms such us Vend, Izettle and others should be considered. A key area that often causes issues with the accounting process is the value of your stock. Where you or your accountant spends less time on this area, you can both save time and costs.

Conclusion

Make use of workshops from HMRC and the free videos from reputable accounting firms to enhance your knowledge. 

Always try to get the best deal from your accountants but also remember they can add value to your business so do your part well and get them to spend more time on business advice/tax planning.

ABOUT THE AUTHOR

Jonathan Amponsah CTA FCCA is an award-winning chartered tax adviser and accountant who has advises business owners on entrepreneurial tax reliefs. Jonathan is the founder and CEO of The Tax Guys.  www.thetaxguys.co.uk

The general rule that says you can claim all expenses incurred wholly and exclusively for the purpose of your business looks as if it should be simple apply, but the reality is more complicated.

Let me share a sample of the surprising things your business cannot tax deduct.

Sponsorship

Sponsoring an event is an area that might surprise you. HMRC will disallow the cost if they can show that perhaps the sporting field you are sponsoring is a director’s, partner’s or proprietor’s regular hobby or if the party being sponsored is a relative of the business owner, or if there is no proposed or actual return on investment from the sponsorship.

So, the trick here is to ensure that the sponsorship deal is structured correctly and there is a clear commercial benefit for your business.

Travel

Let’s assume that you operate as a self-employed doctor or sole trader rather than limited company. You have a home-based office. You travel to see different patients or clients on a regular basis. Your journey starts from your office (at home) and includes a few itinerant travels from one client to the other client. Can you claim the full travel expenses? Logic will tell us that yes. However, the rules deem the travel from your home office to patients / clients as ordinary commuting and therefore not tax deductible.

Client Entertainment

As part of your sales and marketing, you decide to take clients to a relaxed restaurant to discuss new business. The purpose is to negotiate and generate new business. The income will be taxed so the expenses should be ok to put through the business, right? Unfortunately, the rules specifically disallow these expenses to be claimed against tax. Part of the reason behind this is that you could have had the same conversation over a cup of tea in the office, plus there is an element of personal benefit in the entertainment.

Promotional Gifts

It’s true that nothing ever happens in business until a product or a service is promoted and sold. And when it’s sold at a profit, tax gets collected accordingly. However, if you promote your business by spending too much money on promotional gifts to customers and the gifts cost more than £50 per customer, you won’t be able to deduct these costs against your income. Even where the gift cost £50 or less, make sure it carries a conspicuous advert for your business.

Clothes for Work

Imagine you’re a barrister and you’ve purchase your gown to be worn in court. You don’t wear this gown in public. Can you go ahead and claim the cost of the gown against your tax? Not according to the famous tax case of Mallalieu v Drummond which established that “no deduction is available from trading profits for the costs of clothing which forms part of an ‘everyday’ wardrobe. This remains so even where the taxpayer can show that they only wear such clothing in the course of their profession.”

However, some protective and work clothing with logos and other business branding are claimable. If in doubt, speak with a tax accountant.

Staff Reward via Trust

Your staff are well engaged within your business and you want to reward them. You decide to make payment into a Trust to demonstrate that the money has been earmarked for them and waiting to be paid when they hit their targets.

As the money has been paid out of your bank account to the Trust, can you claim it as a legitimate business or staff expenses? Unfortunately, not. Because of a specific tax avoidance rule, this legitimate expense cannot be claimed. 

Parking Fines

Your business is delivering some items to a customer. The driver parks for a few minutes and get a parking ticket. Surely the reason for the fine is because of business activity so it should fall under the wholly and exclusive for the purpose of business rule? Not quite. Fines incurred for breaking the rules are disallowed.

Legal Expenses

Not all legal costs are tax deductible. For example, fees in connection with the purchase of a business premises or investing in shares are disallowed.

In addition, fees that have both personal and business elements may fail the wholly and exclusive test. And legal costs associated with breaking the law are also disallowed. For example, where you’ve got a parking fine and you decide to call your lawyer to defend the case and you lose, you won’t be able to claim the legal fees.

Wages to Spouse or Kids

A great way to keep more of your cash within the family is to employ your spouse and kids. And there is nothing wrong with this plan. However, where you pay family members over and above the market rate, where they don’t actually perform any task for the business or where you’ve structured this working arrangement incorrectly with no evidence or paperwork to back up your plan, HMRC will not allow their salaries to be put through the business. Do take care with this as it’s currently a hot spot for HMRC enquiries.

ABOUT THE AUTHOR

Jonathan Amponsah CTA FCCA is an award-winning chartered tax adviser and accountant who has advises business owners on entrepreneurial tax reliefs. Jonathan is the founder and CEO of The Tax Guys.  www.thetaxguys.co.uk