If you’re a director then taking out a director's loan against the cash in your limited company might seem like a sensible thing to do. But the reality is that overdrawn loans to directors can lead to unintended tax consequences if they’re not properly managed.

Offering benefits-in-kind to your staff is a great way to make your business an attractive place to work. And these benefits add even more value if they’re also either tax-effective or tax-free.

When you’re a company director, it’s not just your business taxes that you need to be on top of. Submitting a self-assessment tax return to account for your personal income tax is one responsibility, but you also need to be aware of any capital gains and the tax implications when making a gain on the disposal of an asset.

Corporation tax is a tax that’s levied on your company’s profits. 

When you operate your business through a limited company, that company is considered to be a separate entity from you as an individual. Among other things, this means you have to pay corporation tax (CT) on your company’s profits.

Once you become an employer, you’ll need to set up a pay-as-you-earn (PAYE) scheme.

All businesses that employ people earning above the National Insurance (NI) lower earnings limit (£120 per week) must register with HM Revenue & Customs (HMRC) as an employer and operate their own PAYE scheme. This applies even if you’re a company owner taking a salary.

When you’re a company director, it’s important to understand the distinction between paying tax on your company profits and tax on your own income. You will pay corporation tax on your profits as a business, and as a director, you’ll also need to pay tax on your personal income as a director, via the self-assessment income tax system.

When you set up a new company, there are certain business taxes you’ll be liable for as a business. But have you also planned for the personal taxes you must pay as a director?  As a company director, it’s not just the company’s corporation tax that you have to pay. 

In the course of funding and growing your business, it’s likely that you’ll take out some form of loan – and will end up paying interest on loans from directors or other third-parties. However, many businesses fail to consider the taxation requirements on these interest payments. 

Giving gifts to your employees can be a great way to increase engagement and raise the overall morale of your team. But how much can you give before there are tax implications? And how do the rules differ if you’re giving gifts to your directors?