Owner managed businesses

There is an increase in the Annual Investment Allowance for capital expenditure from £200,000 to £1,000,000 from 1 January 2019. Businesses which do not draw up accounts to 31 December will need to pro rate the allowance. Where a business needs to make significant capital expenditure that qualifies for capital allowances care must be exercised in the timing of that expenditure. We will be pleased to advise on the tax benefit of such investments in advance of them being made.

For sole traders and family run businesses, employing members of the family (provided they actually get paid and are active in the business) can help reduce the principals’ tax liabilities.

More care is needed when employing minor children as the payment must be at commercial rates, for duties actually performed, within the National Minimum Wage restrictions and not in breach of any employment legislation.  For instance, employing a minor child to help in a restaurant at the weekend at a market rate should be acceptable, whereas working on a building site would not.