The Taxation of small businesses

About the author
Contents
List of abbreviations
Tables of authorities
	Cases
	Statutes
	Regulations
Chapter 1.  Income Tax Computation
	1.1. Aggregation of Taxpayer’s Income
	1.2. Interest
	1.3. Limit on Deductions from Adjusted Net Income
	1.4. Payments to Charities
		1.4.1. Gift Aid scheme
		1.4.2. Gifts of land and buildings or shares
	1.5. Personal Allowances Deducted from Net Income
		1.5.1. Introduction
		1.5.2. Personal allowance
		1.5.3. Transfer of Personal Allowance
		1.5.4. Blind person’s allowance
		1.5.5. Trading allowance
		1.5.6. Property allowance
	1.6. Computation of Tax
		1.6.1. Tax rates
		1.6.2. Scottish and Welsh rates of income tax
		1.6.3. Extension of basic rate band
		1.6.4. Savings allowance
		1.6.5. Dividends Nil Rate Band
	1.7. Tax Reducers
		1.7.1. Categories of tax reducers
		1.7.2. Married couple’s age allowance (MCAA)
		1.7.3. Reduction in MCAA
		1.7.4. Marriage during tax year
		1.7.5. Transfer of MCAA
		1.7.6. Maintenance payments
	1.8. Tax Retained on Interest, Royalties and Gift Aid donations
	1.9. Comprehensive Example
	1.10. Death and Separation
		1.10.1. Death
		1.10.2. Divorce and separation
	1.11. Married Couples – Joint Property
	1.12. Minor Children
	1.13. High Income Child Benefit Charge
Chapter 2.  Taxation of Trading Income
	2.1. Introduction
	2.2. Statutory Definitions of Trading
	2.3. Statutory Trades
	2.4. Case Law
		2.4.1. Badges of trade
		2.4.2. Trading or investment
		2.4.3. Profit motive
		2.4.4. Subject matter
		2.4.5. Frequency of transactions
		2.4.6. Length of ownership
		2.4.7. Supplementary work
		2.4.8. Manner in which assets are acquired and circumstances surrounding sale
	2.5. Gambling and Speculation
	2.6. Illegal Activities
	2.7. Individuals Trading in Shares
	2.8. Definition of Trading – National Insurance
	2.9. Mutual Trading
	2.10. Election to Use Cash Basis
		2.10.1. Conditions for making election
		2.10.2. Amendments to rules relating to computation of profits
		2.10.3. Transitional provisions – unrelieved capital expenditure
		2.10.4. Spreading of adjustment income
	2.11. Capital and Revenue Receipts
		2.11.1. General principles
		2.11.2. Compensation for loss or sterilisation of profit-making apparatus
		2.11.3. Compensation for loss of profit
		2.11.4. Compensation for loss of or damage to fixed assets
		2.11.5. Compensation and liability to tax
		2.11.6. Know-how
		2.11.7. Foreign currency transactions
		2.11.8. Grants
	2.12. Receipts not Received in Course of Trade
		2.12.1. Non-contractual receipts
		2.12.2. Unclaimed money
		2.12.3. Commission, discounts and cashback
		2.12.4. Sponsorship
	2.13. Other Receipts
		2.13.1. Rebates, insurance receipts, damages, statutory payments and interest
		2.13.2. Release from debts
		2.13.3. Directors’ fees and professional appointments
		2.13.4. Rent receivable
		2.13.5. Casual receipts
		2.13.6. Receipts in kind
		2.13.7. Post-cessation receipts
		2.13.8. Coronavirus Support Payments
	2.14. Capital and Revenue Payments
	2.15. Expenditure Incurred in the Course of a Trade
	2.16. Duality of Purpose
		2.16.1. General principles
		2.16.2. Expenditure on meals
		2.16.3. Business clothing
		2.16.4. Travel and motoring expenses
		2.16.5. Duality of purpose – other items
	2.17. Repairs and Maintenance
	2.18. Replacement of Assets
	2.19. Depreciation and Amortisation
	2.20. Subscriptions and Donations
	2.21. Sponsorship
	2.22. Bad Debts
	2.23. Provisions
	2.24. Payments to Employees & Appropriations of Profit
	2.25. Entertainment
	2.26. Gifts to Customers and Samples
	2.27. Gifts to Educational Establishments and Charities
	2.28. Cost of Leasing Cars
	2.29. Legal and Professional Fees
	2.30. Fines and Payments Against the Public Interest
	2.31. Interest and Bank Charges
	2.32. Pre-trading Expenditure
	2.33. Indirect Taxation
	2.34. Compensation and ex gratia Payments to Former Employees
	2.35. Redundancy Payments
	2.36. Removal Expenses to New Business Premises
	2.37. Premiums for Insurance
	2.38. Payments to Employees for Restrictive Undertakings
	2.39. Staff Training and Development
	2.40. Counselling Courses in Connection with Termination of Employment
	2.41. Payments to Secure Release from Unprofitable Contracts
	2.42. Payments to Political Parties
	2.43. Preservation of Goodwill
	2.44. Payments on the Cessation of Trade
	2.45. Post-cessation Expenditure
	2.46. Rent
	2.47. Lease Premium
	2.48. Patents and Intellectual Property
	2.49. Telephone
	2.50. Business Rates and Council Tax
	2.51. Security Expenditure
	2.52. Loan Guarantee Payments
	2.53. Use of Home
	2.54. Website Expenditure
	2.55. Expenses Connected with Foreign Trades
	2.56. Valuation of Stock
		2.56.1. General principles
		2.56.2. Appropriations of stock
		2.56.3. Long-term contracts
		2.56.4. Discontinuation of trade
	2.57. Overseas Aspects of Trading
		2.57.1. Chargeability of overseas trades
		2.57.2. Computation of profits of overseas trades
		2.57.3. Traders not resident in the UK
		2.57.4. Payments to entertainers and sportsmen
Chapter 3.   Capital Allowances on Plant and Machinery
	3.1. Introduction
	3.2. Definition of Plant and Machinery
		3.2.1. Statutory rules
		3.2.2. Case law
	3.3. Assets Deemed to be Plant and Machinery
		3.3.1. Thermal insulation of industrial buildings
		3.3.2. Assets acquired for personal security
		3.3.3. Computer software
	3.4. Definition of Expenditure
		3.4.1. General principle
		3.4.2. Grants, subsidies and contributions
		3.4.3. Loan interest
		3.4.4. Exchange rate fluctuations
		3.4.5. Assets originally acquired for non-qualifying purposes
		3.4.6. Assets acquired at undervalue
	3.5. Date of Expenditure
	3.6. Disposal of Assets
	3.7. Allowances
		3.7.1. Writing down allowance (WDA)
		3.7.2. Annual investment allowance (AIA)
		3.7.3. Assets elligle for 100% ECA
			Energy-saving plant and machinery
			Cars with low CO2 emissions
			Expenditure on zero-emission goods vehicles
			Expenditure on plant or machinery for gas refuelling stations
			Expenditure on electric vehicle charging points
			Expenditure on environmentally beneficial plant and machinery
	3.8. Calculation of Capital Allowances
		3.8.1. Categories of plant and machinery
			General pool expenditure
			Special rate expenditure
			Assets with private use
			Partial depreciation subsidies
	3.9. Short-life Assets
	3.10. Cessations and Successions
		3.10.1. Cessations
		3.10.2. Successions
	3.11. Hire Purchase and Leasing
	3.12. Fixtures
		3.12.1. Definition
		3.12.2. Fixture installed in building in which qualifying activity is carried on
		3.12.3. Transfer of allowances to lessee
		3.12.4. Equipment leases
	3.13. Disposal of Fixtures
		3.13.1. Sale of qualifying interest
		3.13.2. Expiry of qualifying interest
		3.13.3. Discontinuance of qualifying activity
		3.13.4. Use of fixture for purpose other than qualifying activity
		3.13.5. Transfer of allowances to lessee
		3.13.6. Severance of fixture
		3.13.7. Fixture which is subject of an equipment lease or is owned by energy services provider
		3.13.8. Merger of interest
		3.13.9. Apportionment of sale proceeds
		3.13.10. Allowances claimed by subsequent owner
		3.13.11. Fixtures – anti-avoidance provision
	3.14. Anti-avoidance
Chapter 4.  Other Allowances
	4.1. Business Premises Renovation Allowance
		4.1.1. Qualifying expenditure
		4.1.2.  Qualifying building
		4.1.3. Relevant interest
		4.1.4. Initial allowance
		4.1.5. Writing down allowance
		4.1.6. Grants and payments towards expenditure
		4.1.7. Balancing adjustments
		4.1.8. Termination of lease
	4.2. Patents
	4.3. Know-how
	4.4. Structures and Buildings Allowances
		4.4.1. Introduction
		4.4.2. Rate of allowance and relevant interest
		4.4.3. Qualifying activities and use
		4.4.4. Qualifying expenditure
Chapter 5.  Basis Periods
	5.1. Current Year Basis (CYB)
	5.2. Opening Year Rules
	5.3. Closing Year Rules
	5.4. Tax Planning on Commencement
	5.5. Tax Planning on Cessation
	5.6. Change of Accounting Date
	5.7. Period Less than 12 Months
	5.8. Period More Than 12 Months
	5.9. Two Accounting Dates in Tax Year
	5.10. No Accounting Date in Tax Year
	5.11. Transitional Overlap Relief
	5.12. Overlap Profits and Trading Allowance
	5.13. Changes in Size and Nature of Operations
	5.14. Death of Trader
	5.15. Mergers and Demergers
	5.16. Date of Commencement and Cessation
	5.17. Successions
	5.18. Trader Becoming, or Ceasing to be, UK Resident
Chapter 6.  Trading Losses
	6.1. Introduction
	6.2. Offset Against Future Trading Income
	6.3. Transfer of Business to a Company
	6.4. Offset Against Total Income and Carry-back
	6.5. Offset Against Capital Gains
	6.6. Losses in the Early Years of Trading
	6.7. Terminal Loss Relief
	6.8. Tax planning and loss relief
	6.9. Restriction of Loss Relief
	6.10. Late Claims
Chapter 7.   Property Income
	7.1. Introduction
	7.2. Basis of Assessment
	7.3. Dilapidations
	7.4. Lease Premiums
		7.4.1. Premium taxable as property income
		7.4.2. Duration of lease
		7.4.3. Amount of premium
		7.4.4. Premiums on grant of sub-lease
		7.4.5. Reverse premiums
		7.4.6. Assignment of leases granted at undervalue
	7.5. Sale with Right of Conveyance
	7.6. Expenditure Deductible
	7.7. Sea Walls
	7.8. Mutual Business
	7.9. Relief for Capital Expenditure
	7.10. Losses
	7.11. Furnished Holiday Lettings
	7.12. Rent a Room Scheme
Chapter 8.  Employment and Self-employment
	8.1. Introduction
	8.2. Benefits of Self-employment
	8.3. Definition of Employment and Self-employment
	8.4. Tests for Employment
		8.4.1. General principles
		8.4.2. Mutuality of obligations
		8.4.3. Control
		8.4.4. Right to use a substitute or obtain assistance
		8.4.5. Provision of equipment
		8.4.6. Financial risk
		8.4.7. Part and parcel of organisation
		8.4.8. Employee benefits and right of dismissal
		8.4.9. Method of payment
		8.4.10. Intention of the parties
		8.4.11. Zero-hours contracts
		8.4.12. The Gig Economy
	8.5. Workers Supplied by Agencies
	8.6. Non-executive Directors
	8.7. Self-employment or a Number of Separate Employments
	8.8. Provision of Services Through an Intermediary – Income Tax
		8.8.1. Legislative framework
		8.8.2. Calculation of deemed payment
		8.8.3. Deemed payment – treatment by intermediary
		8.8.4. Provision of services through an intermediary – national insurance
		8.8.5. Payment of tax on deemed payment
		8.8.6. Multiple intermediaries
	8.9. Managed Service Companies
	8.10. National Insurance – Deemed Employment
	8.11. National Insurance – Deemed Self-employment
	8.12. National Insurance – Persons Deemed not to be Employed
Chapter 9.  Employment  Income
	9.1. Income Tax – Introduction, Charging Legislation and General Definitions
	9.2. National Insurance Contributions – Charging Legislation and General Definitions
	9.3. Income Tax and National Insurance – a Comparison
		9.3.1. General
		9.3.2. Cash payments
		9.3.3. Expenses
		9.3.4. Capital allowances, pension contributions and other deductions
		9.3.5. Benefits in kind
	9.4. Time of Receipt
	9.5. Cash Payments to Employees
	9.6. Payments Arising by Reason of Employment
		9.6.1. Inducements (‘Golden Hellos’)
		9.6.2. Employment income provided through third parties
		9.6.3. Tips and gratuities
		9.6.4.  Payments to sales representatives
		9.6.5. Other payments arising by reason of employment
	9.7. Payments on Termination of Employment or Variation of Employment Terms
		9.7.1. Payments in lieu of notice (PILONs) and ‘gardening leave’
		9.7.2. Payments on death or disability
		9.7.3. Compensation for loss of office or variation of terms of employment
		9.7.4. Calculation of Termination Payment
		9.7.5. Legal Costs Associated with Termination of Employment
		9.7.6. Post-employment notice pay (PENP)
	9.8. Damages and Compensation Paid to Employee
	9.9. Sick Pay and Sickness and Other Benefits
	9.10. Commission, Cashbacks and Discounts
	9.11. Tax-free Lump Sum Payments
	9.12. Payment of Expenses to Third Parties on Behalf of Employee
	9.13. Payments for Clothing
	9.14. Directorships Held by Partners
	9.15. Payment of Employee’s Tax by Employer
	9.16. Income Tax – Deduction of Expenses
	9.17. Reimbursement of Expenses
		9.17.1.  Income tax
		9.17.2.  Expenses – Class 1 NIC
	9.18. Qualifying Travel Expenses
		9.18.1.  Case law
		9.18.2.  Statutory relief for travel to temporary place of employment
		9.18.3.  Travel expenses – agency workers
		9.18.4.  Travel expenses of workers providing services through intermediaries
		9.18.5.  Other deductible travel expenses
		9.18.6.  Overnight allowances – lorry drivers
	9.19. Entertainment
	9.20. Expenses Incurred by Homeworkers
	9.21. Other Deductible Expenses
	9.22. Payments and Benefits Exempt from Income Tax and Class 1 National Insurance Contributions
		9.22.1.  Job-related accommodation
		9.22.2.  Loans to employees
		9.22.3.  Suggestion schemes
		9.22.4.  Long service awards
		9.22.5.  Gifts to employees and payments made to employees in a personal capacity
		9.22.6.  Entertainment
		9.22.7.  Small gifts from third parties
		9.22.8.  Staff entertainment
		9.22.9.  Crèche and childcare facilities
		9.22.10. Sports and recreational facilities
		9.22.11. Free or subsidised meals
		9.22.12. Removal costs
		9.22.13. Fixed profit car scheme (FPCS)
		9.22.14. Passenger payments
		9.22.15. Bicycles and motorcycles
		9.22.16. Car parking facilities
		9.22.17.  Provision of vehicle-battery charging
		9.22.18. Works bus services
		9.22.19. Subsidies provided to public bus services
		9.22.20. Transport and accommodation provided due to industrial action
		9.22.21. Taxis provided for employees required to work late
		9.22.22. Breakdown of car sharing arrangements
		9.22.23. Transport – disabled employees
		9.22.24. Scholarships and apprenticeships
		9.22.25. Work-related training
		9.22.26. Contributions to individual learning account (ILA) training
		9.22.27. Retraining courses
		9.22.28. Air miles and car fuel coupons
		9.22.29. Payment of expenses for employees temporarily absent from normal place of employment
		9.22.30. Expenses incurred whilst employed abroad
		9.22.31. Travel and other costs of non-domiciled individuals working in the UK
		9.22.32. Mobile telephones
		9.22.33. Workplace counselling
		9.22.34. Pension advice
		9.22.35. Medical check-ups and payment of medical expenses
		9.22.36. Eye tests and special corrective appliances
		9.22.37. Recommended medical treatment
		9.22.38. Health and employment insurance payments
		9.22.39. Security assets
		9.22.40. Accommodation, supplies or services used in the performance of duties
		9.22.41. Employee liabilities and indemnity relief
		9.22.42. Apprenticeship bursaries for care leavers
		9.22.43. Payment of expenses to voluntary office-holders
		9.22.44.  Contributions to retirement benefit schemes
Chapter 10. Benefits in Kind
	10.1. Valuation of Benefits in Kind
	10.2. Benefits – Definition of Cost
	10.3. Exemption for Trivial Benefits
	10.4. Lower-paid Employment
	10.5. Ministers of Religion
	10.6. Carers
	10.7. Benefits in Kind and National Insurance Contributions
	10.8. Payment of Expenses by Employer
	10.9. Salary Sacrifice Arrangements
	10.10. Gift of Assets to Employees
		10.10.1. General rule
		10.10.2. Readily convertible assets
		10.10.3. Beneficial interest in assets listed in Social Security (Contributions) Regulations 2001 Sch. 3 Pt. IV
		10.10.4. Gift to employees of computers and bicycles
	10.11. Cash Vouchers, Non-cash Vouchers and Credit Tokens
		10.11.1. General principles
		10.11.2. Vouchers and credit tokens exempt from income tax class 1 NIC
	10.12. Payment Made to a Registered Pensions Scheme for the Benefit of Two or More People
	10.13. Waiver of Loan
	10.14. Job-related Accommodation
		10.14.1. Scope of benefit charge
		10.14.2. Calculation of benefit
		10.14.3. Additional accommodation benefit
		10.14.4. Properties acquired more than six years before first occupied by current occupant
		10.14.5. Salary sacrifice option
		10.14.6. Living accommodation provided to more than one employee in same period
		10.14.7. Accommodation used partly for business purposes
	10.15. Assets Available for Private Use
	10.16. Expenses Connected with Living Accommodation
	10.17. Cars
		10.17.1. Scope of benefit
		10.17.2. Cost of car
		10.17.3. Cost of classic cars
		10.17.4. Calculation of benefit
		10.17.5. More than one car made available
		10.17.6. Car unavailable for part of year
		10.17.7. Use of car by family members and shared use
		10.17.8. Salary Sacrifice Arrangements
		10.17.9. Summary of car benefit percentages
	10.18. Fuel for Private Use
	10.19. Pool Cars and Vans
	10.20. Vans and Heavier Commercial Vehicles
		10.20.1. Scope of benefit
		10.20.2. Vans and heavier commercial vehicles – calculation of benefit
	10.21. Emergency Vehicles
	10.22. Beneficial Loans
		10.22.1. Calculation of benefit
		10.22.2. Rate of interest – foreign currency loans
		10.22.3. Replacement loans
		10.22.4. Exempt loans
		10.22.5. De minimis exemption
	10.23. Scholarships
	10.24. Relocation Packages and Guaranteed Selling Price Schemes
	10.25. Medical Treatment and Medical Insurance
Chapter 11. National Insurance Contributions
	National Insurance Contributions and Employees
	11.1. Earnings Period
		11.1.1. General rules
		11.1.2. Earnings period in unusual circumstances
		11.1.3. Payment not made on usual day
		11.1.4. Payment of earnings of more than one period made in same earnings period
		11.1.5. Change in length of earnings period
		11.1.6. Joiners and leavers
	11.2. Aggregation of Earnings
		11.2.1. General principles
		11.2.2. Exceptions to requirement to aggregate earnings
	11.3.  Rate of Class 1 National Insurance Contributions
	11.4. Class 1A Contributions
	11.5. Calculation of Contributions
	11.6. Class 1A Charge Where Benefits Provided by Third Parties
	11.7. Earners over Pensionable Age
	11.8. Notional Payments of Class 1 Contributions
	National Insurance Contributions and the Self-Employed
	11.9. Class 2 Contributions
		11.9.1. Liability to Pay Contributions
		11.9.2. Small Profits’ Threshold
	11.10. Class 4 Contributions
		11.10.1. Liability to pay contributions
		11.10.2. Special Class 4 contributions
		11.10.3. Exception from Class 4 contributions
	11.11. Annual Maximum Contributions
Chapter 12. Pensions
	12.1. Introduction
	12.2. Scope of Regime
	12.3. Registration of Pension Schemes
	12.4. Payments by Registered Pension Schemes
	12.5. Pension Payments
	12.6. Contributions
		12.6.1. Member Contributions
		12.6.2. Employers’ Contributions
	12.7. Pension Advice
	12.8. Purchase of Shares in Sponsoring Employer
	12.9. Loans to Employers
	12.10. Unauthorised Payments Charge
Chapter 13. Capital Gains Tax and Chargeable Gains
	13.1. Scope of Capital Gains Tax (CGT)
	13.2. Exemptions
	13.3. Residence
	13.4. Capital Losses
		13.4.1. Interaction of capital losses with annual exemption
		13.4.2. Interaction of capital losses and capital allowances
	13.5. Offset of Trading and Other Losses against Capital Gains
		13.5.1. Trading losses
		13.5.2. Post-cessation trading and post-employment expenses
	13.6. Capital Gains Tax Rate
	13.7.  Disposal Consideration
	13.8. Date of Disposal
	13.9. Allowable Costs
	13.10. Assets Owned at 31 March 1982
	13.11. Married Couples and Civil Partners
	13.12. Disposal to Connected Parties
	13.13. Valuation of Assets
	13.14. Negligible Value Claim
	13.15. Value Shifting
	13.16. Disposal by Way of Security
	13.17. Hire Purchase Transactions
	13.18. Appropriations to and from Trading Stock
	13.19. Series of Transactions
	13.20. Options
	13.21. Debts
	13.22. Compensation
	13.23. Asset Derived from another Asset
	13.24. Location of Assets
	13.25. Chattels and Wasting Assets
		13.25.1.  Definitions
		13.25.2.  Capital allowances are not available
		13.25.3.  Capital allowances are available
			SUMMARY TABLE
	13.26. Part Disposals
		13.26.1.  General part disposal rule
		13.26.2.  Small part disposals of land
	13.27. Leases
		13.27.1.  Assignment of lease
		13.27.2. Grant of lease
		13.27.3.  Sub-lease granted out of short lease
		13.27.4.  Duration of lease
		13.27.5.  Leases of property other than land
		13.27.6.  Leases not treated as wasting assets
		13.27.7.  Extension of leases
	13.28. Loss or Destruction of Asset
	13.29. Restoration of Assets
	13.30. Replacement of Business Assets
		13.30.1.  Introduction
		13.30.2. Categories of assets qualifying for relief
		13.30.3.  Use of assets in trade
		13.30.4.  Time limits
		13.30.5.  Provisional claim
		13.30.6.  Partial re-investment of proceeds
		13.30.7.  Other points
		13.30.8.  Held-over gains
		13.30.9.  Compulsory purchase
		13.30.10. Exchange of joint interest in land
	13.31. Gift Relief
		13.31.1.  Operation of relief
		13.31.2.  Crystallisation of Gain
	13.32.  Transfer of Assets to a Limited Company
		13.32.1.  Operation of Relief
		13.32.2.  Transfer of Goodwill
	13.33. Business Asset Disposal Relief
		13.33.1.  Operation of relief
		13.33.2. Transfer of assets to a company – transitional provision
		13.33.3. Associated disposals
		13.33.4.  Lifetime limit
	13.34. Investors’ Relief
	13.35. Losses on Loans to Traders
	13.36. Loan Guarantees
Chapter 14. Corporation Tax
	14.1. Scope of Corporation Tax
		14.1.1. Non-resident companies
	14.2. Trading income
		14.2.1. General
		14.2.2. Annual investment allowance – restrictions applying to companies
		14.2.3. First-year tax credits
		14.2.4. Expenditure on plant and machinery in designated assisted areas
	14.3. Loan relationships
		14.3.1. Definition of loan relationship
		14.3.2. Scope of loan relationship rules
		14.3.3. Accounting for loan relationships
		14.3.4. Basis of taxation
		14.3.5. Loan relationships between connected parties
	14.4. Intangible Fixed Assets
		14.4.1. Scope of provisions
		14.4.2. Treatment of gains and losses
		14.4.3. Deductible expenditure
		14.4.4. Bad debts
		14.4.5. Realisation of intangible fixed assets
		14.4.6. Change of accounting basis
		14.4.7. Rollover relief
		14.4.8. Groups
		14.4.9. Computer software
		14.4.10. Transactions with related parties
		14.4.11. Anti-avoidance
		14.4.12.  Patent box
	14.5. Derivative Contracts
		14.5.1. General
		14.5.2. Taxation of profits and losses
		14.5.3. Related transactions
		14.5.4. Derivatives for unallowable purposes
		14.5.5. Capitalised expenditure
		14.5.6. Transactions with related parties
	14.6.   Property Income
	14.7. Chargeable Gains
		14.7.1. Indexation Allowance
		14.7.2. Indexation and Losses
		14.7.3. Assets Owned at 31 March 1982
			Computation of gains and losses
			March 1982 value election
			Assets held at 31 March 1982 – roll-over relief
		14.7.4. Assets Owned at 6 April 1965
			General rule
			Land with development value
			Classes of use:
		14.7.5. Rollover Relief
	14.8. Dividends Received
	14.9. Payments to Charities
	14.10. Distributions
		14.10.1.  General
		14.10.2.  Stock dividends
	14.11. Chargeable Accounting Periods
	14.12. Computation of Tax Liability
		14.12.1.  Rates of corporation tax
	14.13. Corporation Tax – Interaction with Income Tax
		14.13.1.  Introduction
		14.13.2.  Accounting for income tax
	14.14. Losses and Corporation Tax
		14.14.1.  Introduction
		14.14.2.  Offset against future profits
		14.14.3.  Offset against total profits of the period
		14.14.4.  Offset against total profits of earlier periods
		14.14.5. Terminal Loss
		14.14.6.  Losses on-trading loan relationships, foreign exchange and financial instruments
		14.14.7.  Losses on Miscellaneous Transactions
		14.14.8.  Property Losses
		14.14.9.  Capital Losses
		14.14.10. Excess Management Charges
		14.14.11. Anti-avoidance: trades carried on on an uncommercial basis
		14.14.12. Anti-avoidance: change in ownership
		14.14.13. Transfer of Losses on Transfer of Trade
	14.15. Groups and Consortia
		14.15.1. Introduction
		14.15.2. Related 51% group companies
		14.15.3. Group relief – definition of group
		14.15.4. Group relief – losses available for group relief
		14.15.5. Group relief – surrender of losses
		14.15.6. Group relief – non co-terminous accounting periods
		14.15.7. Group relief – arrangements exist for company to leave group
		14.15.8. Group relief – payment for losses surrendered
		14.15.9. Group relief – time limit for claim
		14.15.10. Chargeable gains groups — definition of group
		14.15.11. Chargeable gains groups — transfer of assets
		14.15.12. Chargeable gains groups — company leaving group
		14.15.13. Chargeable gains groups — roll-over relief - groups
		14.15.14. Chargeable gains groups — appropriation of capital asset as trading stock
		14.15.15. Chargeable gains groups — transfer out of stock for use as capital asset
		14.15.16. Chargeable gains groups — pre-entry losses
		14.15.17. Chargeable gains groups — pre-entry gains
		14.15.18. Chargeable gains groups — depreciatory transactions
		14.15.19. Consortia
	14.16. Close Companies
		14.16.1. General
		14.16.2.  Control
		14.16.3.  Director
		14.16.4.  Participator
		14.16.5.  Associates
		14.16.6. Exemptions from close company status
		14.16.7. Consequences of being a close company — loans to participators
		14.16.8. Consequences of being a close company — benefits in kind provided to participators
	14.17. Companies with Investment Business
	14.18. Close Investment-holding Companies
	14.19. Demergers
		14.19.1. General
		14.19.2.  Approval
	14.20. Purchase of Own Shares
		14.20.1. General
		14.20.2. Repurchase for Benefit of Trade
		14.20.3. Payment of Inheritance Tax Liability
Chapter 15. Incorporation, Disincorporation and Choice of Business Medium
	15.1. Introduction
	15.2. Incorporation
		15.2.1. Cessation
		15.2.2. Transfer of assets
		15.2.3. Transfer of trading stock
		15.2.4. Losses
		15.2.5. Transfer of chargeable assets
		15.2.6. Transfer of goodwill
		15.2.7. Stamp Duty Land Tax
		15.2.8. Inheritance tax
		15.2.9. Value Added Tax
		15.2.10. Notification of incorporation
	15.3. Disincorporation
		15.3.1. Methods of disincorporation
		15.3.2. Chargeable accounting periods and payment of tax
		15.3.3. Capital allowances
		15.3.4. Transfer of trading stock
		15.3.5. Losses
		15.3.6. Chargeable gains
	15.4. Disincorporation Relief
		15.4.1. Loans to participators
		15.4.2. Value Added Tax
		15.4.3. Pre-sale dividends and capital distributions
	15.5. Choice of Business Medium
		15.5.1. Advantages of Company
		15.5.2. Disadvantages of company
	15.6. Comparison of Tax Treatment of Companies and Sole Traders
		15.6.1. Overall tax burden
		15.6.2. Remuneration
		15.6.3. Computation of profits
		15.6.4. Private use of assets
		15.6.5. Loss relief
		15.6.6. Tax rates
		15.6.7. National insurance
		15.6.8. Payment of expenses
		15.6.9. Cash flow
		15.6.10.  Other points
	15.7. Salary vs Dividends
Chapter 16. Special Classes of Taxpayers
	16.1. Construction Industry Scheme
		16.1.1. Introduction
		16.1.2. Registration for Gross Payment
	16.2. Farmers and Market Gardeners
		16.2.1. Introduction
		16.2.2. Fluctuating profits
		16.2.3. Grants, subsidies and compensation
		16.2.4. Levies
		16.2.5. Cultivations, unexhausted manures and growing crops
		16.2.6. Deadstock
		16.2.7. Livestock
		16.2.8. Herd basis
		16.2.9. Grant of grazing rights etc.
		16.2.10. Orchards.
		16.2.11. Farmhouse rent and farm cottages.
		16.2.12. Quotas.
		16.2.13. Stud farms.
		16.2.14. Loss relief
	16.3. Authors, Artists and Composers
		16.3.1. Relief for fluctuating profits
		16.3.2. Awards and bursaries
		16.3.3. Royalties to person other than author
	16.4. Actors, Musicians and Entertainers
		16.4.1. Employed or self-employed
		16.4.2. Expenses
		16.4.3. Clothing
		16.4.4. Medical expenses
	16.5. Entertainers – other workers
	16.6. Builders
		16.6.1. Mortgage
		16.6.2. Retentions
		16.6.3. Premiums
		16.6.4. Ground rents
		16.6.5. Rent
		16.6.6. Property not acquired as trading stock
		16.6.7. Compensation under town and country planning acts
		16.6.8. Private street works
		16.6.9. Own occupation
	16.7. Care Providers
		16.7.1. Childminders
		16.7.2. Foster carers
		16.7.3. Adult carers and adult placement schemes
		16.7.4. Respite carers
		16.7.5. Capital gains – principal private residence relief
	16.8. Barristers
	16.9. Bookmakers
	16.10. Breweries and Licensed Premises
		16.10.1. Types of houses
		16.10.2. Allowable expenditure
		16.10.3. Disallowable expenditure
		16.10.4. Tied houses – rent
		16.10.5. Tied houses – allowable deductions
		16.10.6. Tied houses – disallowable deductions
		16.10.7. Licensed premises – legal expenses
		16.10.8. Licensed premises – rent payable
		16.10.9. Public house tenants – compensation received
	16.11. Doctors and Dentists
		16.11.1. Fees received by hospital staff
		16.11.2. Allowances received
		16.11.3. Reimbursement of Rent
		16.11.4. Cremation fees donated to charity
		16.11.5. Remuneration withheld for breach of terms
		16.11.6. Part-time hospital doctors
		16.11.7. Expenses
		16.11.8. Dentists – successions
	16.12. Motor Dealers – Valuation of Used Vehicle Stocks
	16.13. Fishermen
		16.13.1. Grants
			Decommissioning grant
			Laying-up grant
			Exploratory voyage grant
			Joint venture grant
	16.14. Franchising
		16.14.1. Franchiser
		16.14.2. Franchisee
	16.15. Solicitors
		16.15.1. Part-time offices
		16.15.2. Interest
		16.15.3. Temporary loans and guarantees
	16.16. Sub-postmasters
	16.17.  Clubs, Societies and other Mutual Organisations
		16.17.1. Profits from mutual trading
		16.17.2. Profits from dealing with non-members
		16.17.3. Clubs incorporated as limited company or industrial or provident society
		16.17.4. Interest paid or received
		16.17.5. Commission income
		16.17.6. Distributions
		16.17.7.  Payments by companies to community amateur sports clubs (CASCs)
	16.18. Charities
		16.18.1. Trading income
		16.18.2. Gifts
		16.18.3. Investment income
		16.18.4. Payments from other charities
		16.18.5. Fund-raising events and lotteries
		16.18.6. Exemption for transactions in deposits
		16.18.7. Restriction on exemptions
		16.18.8. Profit-shedding through Gift Aid
	16.19. Credit Unions
	16.20. Housing Associations
	16.21. Self-build Societies
Chapter 17. Partnerships
	17.1. Definitions
	17.2. Limited Partnerships
	17.3. Limited Liability Partnerships
	17.4. Allocation of Profits
	17.5. Assessment of Partnerships
	17.6. Other Income of Partnership
	17.7. Non-trading Partnerships
	17.8. Post-cessation Receipts
	17.9. Losses
	17.10. Notional Losses
	17.11. Mergers and Amalgamations
	17.12. Restriction on Loss Relief for Limited and Non-Active Partners
	17.13. Partnership Property Income
	17.14. Corporate Partners
	17.15. Partnerships and Capital Gains Tax
		17.15.1. General principles
		17.15.2. Distribution of assets in kind amongst partners
		17.15.3. Change in partnership profit sharing ratios
		17.15.4. Adjustment through the accounts
		17.15.5. Payments outside the accounts
		17.15.6. Transfer between persons not at arm’s length
		17.15.7. Disposals – annuity payments
		17.15.8. Shares acquired in stages
		17.15.9. Roll-over relief
	17.16. Roll-over and Gift Relief - LLPs
	Index