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Limited Company Asif Patel Limited Company Asif Patel

Recording directors’ expenses correctly

It is only permissible for a company to deduct expenditure in computing its taxable profits if incurred wholly and exclusively for the purposes of the trade. Since a company is a separate legal entity that stands apart from its directors and shareholders, it will not incur personal expenses.

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Limited Company Asif Patel Limited Company Asif Patel

Directors’ loans – Beware of ‘bed and breakfasting’

It can make sense financially for directors of personal and family companies to borrow money from the company rather than from a commercial lender. Depending on when in the financial year the loan is taken out, it is possible to borrow up to £10,000 for up to 21 months without any tax consequences. However, if the loan remains outstanding beyond a certain point, tax charges will apply.

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Limited Company Asif Patel Limited Company Asif Patel

Getting ready for off-payroll working changes

From 6 April 2020 the off-payroll working rules that have applied since 6 April 2017 where the end client is a public sector body are to be extended to large and medium private sector organisations who engage workers providing their services through an intermediary, such as a personal service company.

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