The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
How to raise sufficient finance to commence and continue operating is one of the most important considerations for most types of business.
There are some fairly obvious sources of financing, such as bank finance, however there are also several types of tax efficient financing available, such as the enterprise investment scheme (EIS) and venture capital trusts (VCT). Obtaining tax advice at an early stage to ensure that these reliefs are available can help attract and retain suitable investors. This guidance note explores some of the options available and the relevant tax considerations for each one.
Most businesses will have to take out a loan of some sort and the tax implications will differ depending on the terms of the loan and the identity of the lender. Generally, the loan relationships regime applies. See the Corporate debt ― overview guidance note and associated notes for information on the tax implications of corporate debt.
Interest arising on bank loans and overdrafts is usually allowable when it is accrued in the accounts. Certain costs of arranging loan finance are also allowable under the loan relationships rules. For further information, see the Taxation of loan relationships guidance note.
If a company enters into a loan arrangement with an entity other than a bank, there may be additional tax implications. For example, loans between certain connected parties are subject to anti-avoidance provisions known as the ‘late interest’ rules. The relevant legislation is set out in CTA 2009, Part 5, Chapter 8. These rules most commonly apply where interest is paid to companies in a non-qualifying territory (broadly speaking, a ‘tax haven’) or to a participator of a close company. If the interest on this type of loan is accrued but not paid over with
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
There are several sets of provisions in the Taxes Acts which relate to ‘close’ companies, most of which are anti-avoidance measures aiming to catch transactions between those companies affected and their owners, where there may otherwise be a tax advantage. Broadly speaking, most owner-managed or
IntroductionSubsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel. See the Travel expenses guidance note for more information of when
Many people work from home either on an informal or a full-time basis. These people can be employed or self-employed, and their employment status affects the expenses they can claim as a deduction from their earnings.When dealing with someone working from home, it is important to remind him that
Why is this important?Tax-free amountEach individual, whether or not they are resident in the UK, is entitled to an annual exempt amount when calculating the taxable amount of their chargeable gains for the tax year (although see the exceptions below). The annual exempt amount is also known as the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.