Tax Break for "Small Business" Owners ends 1st March

Deadline looms for ESC C16 - Act Fast to save tax

Any directors of small businesses who want to wind up their company and distribute surplus profits to their shareholders have a very short time to take advantage of this tax break.

Under this tax break the amount of tax available to be saved can be up to 40%, for a 50% tax payer.

Under a new law passed in February this year, this favourable tax treatment will only apply to companies whose retained profits are less than £25,000.

If you would like to take advantage of this opportunity while it exists, there is no time to delay. Call us and we will get the ball rolling before 1st March 2012.

After 1st March the tax treatment for business owners will get much more complicated if the intended distribution is over the £25,000 limit.

The Institute of Chartered Accountants said that where company directors winding-up a company make a distribution which is less than £25,000 together with earlier relevant distributions, exceed £25,000, will have to decide whether they are liable to capital gains tax or income tax, on their self-assessment tax return.

Gordon D'Silva, our resident tax expert, can advise you on this in any other area of company tax returns. Opportunities exist to save tax that many accountants miss, and it is important to get up-to-date advice on any situation your company may find itself in. Call 020 8241 3000 today.