Blog

When planning how to finance your business, it’s crucial not only to assess the availability and suitability of funding options — but also to consider the tax implications of each. The tax treatment of business finance can significantly affect your profitability, compliance, and future decision-making. Below, we explore the tax consequences associated with various sources of business finance, from personal investment to crowdfunding and government grants.

With the rise of digital platforms and flexible working, more people than ever are generating income from “side hustles” — activities undertaken to supplement income from a main job or profession. While side hustles offer valuable financial flexibility, many individuals may not realise that this income can trigger tax or National Insurance (NI) obligations.

Many directors of small companies, particularly those who have transitioned from self-employment, often blur the lines between business and personal finances. Running all expenses through the company bank account may seem convenient, but doing so can lead to significant tax consequences. In this post, we explore the tax position when a company pays for a director’s personal expenses and provide practical insights to help business owners navigate this issue effectively.

When it comes to VAT, the rules on reclaiming input tax can be tricky — especially when it involves entertaining customers. While VAT on business expenses is generally recoverable, HMRC places strict limitations on VAT recovery for business entertainment. However, there is a key exception when it comes to entertaining overseas customers. In this post, we’ll break down what qualifies as business entertainment, when VAT can be reclaimed, and provide real-world examples to illustrate the rules in practice.