ABSTRACT
This chapter examines the topic of tax as it relates to small businesses in the United Kingdom. A major difficulty of tax planning is that planners must look to the future and attempt to anticipate the tax system, as it will be when current potential projects reach fruition. Many small businesses are family businesses which are run by shareholder-directors. A key question is how to remunerate such individuals tax-efficiently. Interest on money borrowed by a company is an allowable expense to be deducted when arriving at taxable profits. The relief is only available to taxpayers who subscribe for newly issued shares in the qualifying company. The scheme also allows individuals to defer a charge to capital gains tax arising on the disposal of any asset when the gain is reinvested, within a specified time period, by means of a subscription for eligible shares in a qualifying company.
