In a family company scenario, it can be tax-efficient to make salary and dividend payments to family members to utilise their unused allowances and lower-rate tax bands. However, when it comes to paying dividends, there are potential tax traps to avoid.

Your property is a dwelling if all or part of it is used, or could be used, as a residence, for example a house or flat. It includes any gardens, grounds, and buildings within them. Some properties are not classed as dwellings. These include hotels, guest houses, boarding school accommodation, hospitals, student halls of residence, military accommodation, care homes and prisons.

A business will have a visit from a VAT inspector for one of two reasons; a routine visit after selection by the HMRC computer based on the type of business and the level of turnover, or if the business has an unexpectedly large VAT repayment.

The closure of a company can be costly, and there will be various practical financial matters to attend to: for example, if there are staff they may be entitled to redundancy pay; there will possibly be VAT deregistration; the submission of final accounts and tax returns to HMRC (Companies House does not require final accounts); making final creditor payments (possibly including to HMRC); ensuring all debtors have paid; possibly selling company assets; and finally closing the bank account.

If you’re an employer and provide expenses or benefits to employees or directors, you must usually:Report them to HM Revenue and Customs (HMRC)
Pay tax and National Insurance on them.

It is common for family members to be employed within owner-managed businesses. When employing family members, taxpayers need to be aware that where remuneration is set at an uncommercial rate, HMRC may seek to disallow a portion of the expense when computing their taxable profits.

The section 455 tax charge is a specific tax charge levied on a close company where a loan to a ‘participator’ (normally a shareholder) is not cleared by the corporation tax due date falling nine months and one day after the end of the accounting period.

When starting a business, it is usually as self-employed or as a partnership. As the business grows, working through a company may be considered for several reasons (limited liability being one of the more important).

Owner-managers can extract funds from the company in various ways. Typically, the working shareholders may well, in addition to drawing a normal salary, decide whether to extract surplus profits by means of a bonus or dividend.

The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are : Late payment interest rate — 7% from 31 May 2023. Repayment interest rate — 3.5% from 31 May 2023.