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Small Business Tax Planning: All you need to know from start-up to retirement

Book Description

Effective planning of your tax affairs to help your business save money Every profitable business in the UK has to pay tax, but some small businesses pay more tax than is necessary. This book examines the tax liabilities that the owners or managers of small businesses need to bear in mind and explains how to manage these tax requirements in the best possible way so as to avoid paying more tax than you have to. Uniquely, this guide traces how tax should be dealt with throughout the life-cycle of a business, from start-up to the time it is sold, wound up, or passed on, so that whatever stage your business is at this book will be valuable for you. Areas that are covered include: - What business structure you should choose when starting out: self-employed sole trader, partnership or limited company. - How to register your business and when to start paying tax. - When tax inspections might arise and how to deal with them. - How to manage business expenses effectively and make use of relevant tax benefits. - How to withdraw from a business and pass it on, or how to go about selling it. Guidance about tax is spread over many different locations; on the internet, in booklets provided by HMRC, and in magazines and annual publications. Russell Cockburn brings the information together in this simple and incisive summary enabling you to approach your tax affairs as efficiently as possible.

Table of Contents

  1. Cover
  2. Publishing details
  3. About the Author
  4. List of Abbreviations
  5. Preface
    1. What this book covers
    2. Who this book is for
    3. How the book is structured
  6. Introduction – Tax And Your Business
  7. Part One. Setting Up A Business
    1. 1. Business Structure – Choices and Tax Implications
      1. On business structure
      2. Sole trader
      3. Partnership
      4. Limited Company
      5. Weighing up the different structures
      6. Other structures
      7. Tax implications of business location
      8. Summary
    2. 2. Tax Incentives when Starting a Business
      1. Introduction
      2. Capital depreciation allowances
      3. Capital allowances for particular business areas
      4. Research and development costs
      5. Intangibles and goodwill
      6. Allowances for renovating premises
      7. Venture capital reliefs for investors
      8. Tax relief for borrowing costs
      9. Loss reliefs on start-ups
      10. Summary
    3. 3. The Tax Stages of a Business
      1. Introduction
      2. Starting up – corporation tax rules
      3. Forming a partnership
      4. Incorporation of a business
      5. Summary
    4. 4. Compliance and Dealing with the Tax Authorities
      1. Making the right impression
      2. The main tax obligations of a business
      3. Documentation and paperwork
      4. Time limits and telling the tax authorities
      5. Special tax schemes
      6. Business payroll obligations
      7. Summary
    5. 5. HMRC Tax Investigations – Compliance Checks
      1. Introduction
      2. Why a business may be selected for investigation
      3. Profiling and risk assessment
      4. Summary
  8. Part Two. Running A Business
    1. Introduction: The Climate for Tax Planning
      1. Tax avoidance and tax evasion
      2. Tax planning and the courts
      3. Summary
    2. 6. Business Tax Bills
      1. Introduction
      2. Adopt a holistic approach
      3. Proper accounting practice and timing issues
      4. Business expenses
      5. Identify available special reliefs
      6. Involving the family
      7. Use of pensions
      8. Summary
    3. 7. Personal Tax Bills
      1. Introduction
      2. Review the alternative ways of paying yourself
      3. Drawing money from the business with dividends
      4. Flexibility with expenses
      5. Optimise tax relief on borrowings
      6. Personal expenses
      7. Consider using tax effective benefits in kind
      8. Summary
    4. 8. Extracting Cash from a Business
      1. Introduction
      2. Extracting profits as a sole trader
      3. Extracting profits from a company
      4. Review tax effective expenses and benefits
      5. Pension contributions
      6. Structured tax planning
      7. Review methods of property ownership
      8. Restructure loans and business property borrowings
      9. Be wary of taking loans from your company
      10. Corporate partnership
      11. Summary
  9. Part Three. Withdrawing From The Business And Succession Planning
    1. Introduction
      1. Plan early
      2. Get the best out of the tax regime
      3. Review your business structure
    2. 9. Sale of the Business
      1. Consider the tax implications of a sale
      2. Structure ownership carefully
      3. Consider the impact of other tax charges
      4. Apportion sales proceeds accurately
      5. Available business reliefs
      6. Timing the sale
      7. Choose the type of sale – assets or business
      8. Summary
    3. 10. Passing on the Business – Successions
      1. Introduction
      2. Gifts and/or disposals
      3. Structuring the succession
      4. New classes of shares
      5. Share ownership after retirement
      6. Available reliefs
      7. Summary
    4. 11. Implications of Retirement for the Business Owner
      1. A change in tax status
      2. An investor not a partner
      3. Inheritance tax implications
      4. Review your borrowings again
      5. Consider access to other property reliefs
      6. Timing retirement is important
      7. Will planning and family tax implications
      8. Summary
  10. Appendices
    1. Appendix 1: The UK Tax Regime for Small Companies
      1. Outline
      2. Tax residence
      3. Definition of a company
      4. Rates of tax for companies
      5. Tax payment dates
      6. Associated companies
      7. The aggregation of profits and gains
      8. Business profits and commercial accounting principles
      9. Rental businesses and income from property
      10. Single company loss relief
      11. Group companies
      12. Dividend taxation and shareholders
      13. Investment companies
      14. Close companies
    2. Appendix 2: The UK Tax Regime for Small Unincorporated Businesses
      1. Introduction
      2. Profits belong to the proprietor
      3. The self-assessment obligation
      4. Calculating business profits
      5. Charging income tax on business profits
      6. Rules for loss relief and available offsets
      7. Partnership structures
      8. Tax on commencement and cessation