What is s.455 tax on overdrawn Director’s Loan accounts?

This tax is the result of an overdrawn Director’s Loan Account (DLA).  Here is a brief explanation of how they can arise; the implications, and what to do. An overdrawn Director’s Loan Account (DLA) can often arise accidentally when a Director/shareholder takes money...

Do I need to pay tax on rental income?

If you have net rental income on which you’ll have tax to pay, (rent minus expenses) then you must register for a Self- Assessment tax return and keep a record of your rental income and ‘allowable’ expenses (you can find out what they are here...

Should I pay myself extra salary or extra dividends?

Generally, for small Companies, dividends are still more tax efficient than salary because they avoid 13.8% Employer’s National Insurance plus, possibly, 12% Employee’s National Insurance. So usually it’s better to vote, and pay dividends – but it depends on your...

What is the difference between tax avoidance and tax evasion?

The phrase ‘Tax Avoidance’ has become associated with dirty practice.  This is because certain celebrities have avoided Income Tax by being paid via things like offshore Trusts – which has led some politicians to moralise about it. These practices are not...