One of the most pressing issues for most types of business is the raising of sufficient finance to commence, continue or expand activities. However this is done, the business ought to consider the tax implications of the various options. In addition, there are specific tax reliefs which investors may actively seek or encourage a business to adopt. Tax advice at an early stage can maximise the effect of existing investment as well as encourage external investors.

For unincorporated businesses the starting point for raising finance is often through capital provided by the business owners, either the sole trader or the partners in the partnership, or possibly by way of bank borrowings. This guidance note looks at the tax implications of loans within an unincorporated business and also within an OMB company. For more details on raising finance through share capital, see the Raising business finance ― share capital guidance note.