Dealing with directors’ loan accounts

Section 455, Corporation Tax Act 2010 is a key anti-avoidance weapon for owner-managed companies. Without it, owner managers could easily avoid a tax charge by arranging for ‘their’ company to lend them funds (as opposed to paying a ‘taxable’ bonus or dividend).

However, s455 levies a tax charge, equal to 25% of the advance or loan, where a close company makes a loan to a participator (ie shareholder or loan creditor) or their associate (eg spouse, parent, grandparent, child, grandchild, brother or sister). Continue reading

Setting up in the UK – branch or subsidiary?

British-Union-Jack-FlagIf you are a company looking to establish a presence in the UK the question soon arises whether you should set up as a branch or a subsidiary in the UK.  Initially neither may be necessary as the company may be able to test the waters by operating from its home country, with no taxable presence in the UK.

However, once the need for a taxable presence in the UK has been established, or where the business is such that a legal entity in the UK is needed in any case, the parent should consider whether to set up in the UK through a branch (also known for tax purposes as a permanent establishment), or a subsidiary. Continue reading

6 Strategies to Maintain Your Willpower

how-to-get-willpowerIt isn’t enough to just want to achieve a goal. There are going to be times, when you’re busy, tired or discouraged and you’ll feel like you don’t have it in you to keep going. But you have to fight through those feelings to get over the hump and accomplish everything you set out to do. You need to have the willpower to persevere.

Read on for six ways to not get sidetracked and maintain your resolve. Continue reading

2017 Tax & fiscal policy prospects

Death, taxes and childbirth! There is never any convenient time for any of them. – Margaret Mitchell

Taiwo-Oyedele

We often have new hopes and high expectations at the turn of new events including the turn of a new year regardless of past experiences and notwithstanding our current reality.

As a country Nigeria has expectations for tax and so are individuals and organisations. To a large extent and under normal circumstances, tax should be relatively more predictable given that the rules, and administration are totally within the control of appropriate authorities. Unlike attempting to predict the weather for a whole year or other natural and supernatural events.

In any case, here are my key predictions for the tax environment in 2017 based on instinct, observable trends, behaviour of key actors in the tax system, and analysis of past patterns. Continue reading

10 KEY QUALITIES OF A SUCCESSFUL ENTREPRENEUR

The two essential ingredients for success in any new venture is a good business idea and the right people to turn that idea into a business.It has been said that factors such as work values, educational history, family examples, cultural and environmental influences all impact upon and determine a person’s choice of action  in becoming a business entrepreneur.

The crucial test is determining the suitability of yourself and your staff to the venture at hand. You would need to determine suitability in terms of qualifications, training, experience, practical knowledge and achievements in your chosen field of interest. The primary reason why people fail in business is due to a lack of business and technical experience in the area of business they are in. Now, what are the key qualities demanded of a successful entrepreneur? Continue reading

INCREASING TAX REVENUE: IS A NEW APPROACH REQUIRED?

The importance of taxation to a nation’s economic wealth and development cannot be overemphasized. However, the achievement of this goal is often undermined by tax evasion and deliberate attempts by multinationals to shift profits from one jurisdiction to another, amongst others.

Over the years, Nigeria has attempted to use taxation as a compulsory tool for the generation of revenue needed to meet its recurrent and capital requirements; however, there is no evidence that this has yielded the desired results.

The analysis below shows a five (5) year comparison of revenue generated from taxes as a percentage of total Gross Domestic Product (GDP) across three jurisdictions in Africa. Continue reading

THE PLACE OF TECHNOLOGY IN TAX ADMINISTRATION

The current state of the international crude oil market has had an obvious distressing impact on Nigeria’s economy.  For the first time in decades, the Federal Government is placing heavy reliance, compared to prior years, on tax revenue to fund its budget.

The revenue authorities now have a huge responsibility thrust upon them, and are left with no choice but to deploy new strategies to optimize and improve its practices.   The revenue authorities must therefore work efficiently if they are to deliver results. In this digital age, efficiency can be achieved by deploying technology in the practice of tax administration. Continue reading

LATE SELF ASSESSMENT PENALTIES? GIVE A REASONABLE EXCUSE

So you missed the 31st January 2013 deadline, maybe, because it was your wedding day, your birthday anniversary, your favourite TV programme was on, the cat ate the tax return or you simply forgot! What next? Well, welcome to the new HMRC penalties regime. Most British tax payers would agree that the present HMRC penalty regime is harsh, stern and disproportionate but they are left with no choice the returns have to be filed on time. Continue reading