A Special Purpose Vehicle (SPV) is a legal entity formed for a specific and often limited purpose – as suggested by the name. Quite often, an SPV is incorporated and used to manage/let properties. There are some certain benefits to having your assets pooled like this from asset protection, to mitigating risk by separating personal assets to business liabilities – as well as some major tax advantages.

Yes. You can certainly purchase a vehicle through a limited company for a variety of uses. How it’s best done will depend on the vehicle type and your personal circumstances. For instance, is it electric or fuel-based? How is it financed – is it purchased outright, or through Hire Purchase(HP)? Are there any salary sacrifice arrangements? Is it a commercial vehicle like a van, or just a car? The personal tax implications versus the company savings will also come into play.

A Director’s Loan Account (DLA) is a record of transactions between a company and its Director(s). From a bookkeeping perspective, a DLA tracks monies paid in and out by the director(s) personally, separate from their salary, dividends or expenses they have incurred personally on the company’s behalf. Sometimes, bookkeepers and accountants will use the DLA account throughout a financial period to house all these items before conducting a wider piece of analysis in line with the annual accounts.

There are particular rules in place that to stop loans building up company accounts, so it’s important that there is a clear dialogue as to the position of this account so that there are no surprises when it gets to the end of a reporting period.

Everyone’s personal situation is different, so it’s important to have an accountant who is keen to understand a Director(s) wants and needs. Being a Director and Shareholder simultaneously gives you the ability to make use of a salary-dividend type model for extracting money from the company that would have otherwise been subject to tax and National Insurance Contributions (NIC) as an employee.

Implications from a tax and cash perspective of taking on an additional employee (more so for people employing for the first time):

The true cost of taking on a new hire isn’t just the salary you agree to, there are additional employment costs and allowances you should consider before taking the leap for the first time.

• Monthly salary
• Employers National Insurance
• Employers Pension Contributions
• Employment Allowance (to cover Employer NICs)

Understanding these different items, how they are calculated and the timings on when each liabilities are paid are important considerations before hiring. Naturally, the Employer is also responsible for deducting tax/NIC/Student Loan on the employee’s behalf too and will pay these balances over to HMRC with the Employer NICs.

Corporation tax is a tax on the profits of a company or business. It’s usually payable nine months after the end of the financial year. Depending on your specific industry and type of company business, there may be different ways to mitigate or reduce your tax liability.

Allowable business expenses are one way to potentially reduce your corporation tax bill – making sure all expenses are justified and accurately recorded is key in order to benefit from any deductions. If you’re an owner-director, then you need to consider the salary combination for yourself, employees and other types of payments made by the company (such as director’s loan account). This can help reduce your Corporation Tax bill.