Did you know that misunderstanding Director’s Loan Account rules is one of the most common causes of tax and cashflow issues for small companies and their Directors?

A Director’s Loan Account (DLA) records money you take from or lend to your company outside of salary or dividends, such as expenses you pay for the company, cash withdrawals, or loans between you and your company.

At GLX, we regularly speak with directors who are surprised to learn just how easy it is to fall foul of DLA rules. We understand that running your business is your priority, but understanding how much you can withdraw as a business owner is crucial.

Here are some Director’s Loan Account rules to be aware of:
– Taking out more money than you’ve put in creates an overdrawn DLA. This means you owe money back to the company. If you don’t repay the overdrawn amount within 9 months after the company’s year-end, the company faces a Corporation Tax charge of 32.5% (known as Section 455 tax).
– Loans under £10,000 can be interest-free. For loans above this, interest must be charged. If not, the difference is treated as a benefit in kind and reported on a P11D, potentially creating a personal tax liability.
– Repaying the loan within the deadline avoids the Section 455 charge. The company can reclaim this tax if repaid later, but this can create cash flow challenges.
– Writing off the loan or treating it as a dividend can trigger further personal tax implications.
– Regularly documenting and reconciling your DLA helps prevent surprises and ensures your accounts are accurate.

HMRC monitors Director’s loans closely and may impose penalties for non-compliance, so making sure you are well informed will help you avoid any issues in the future.

If you’re unsure about your Director’s loan or need help managing withdrawals and tax effects, contact GLX to discuss your situation and we will guide you every step of the way.

If you’re a company director, your salary and dividend strategy can make a significant difference to how much tax you pay and how much income you take home. Now that the new tax year is underway, it’s a great time to review whether your current approach is still the most tax-efficient option.

Why Your Income Structure Matters

By balancing salary and dividends, many directors can significantly reduce their tax and National Insurance liability. In fact, with the right strategy, you could take home approximately £46,700 from a total income of £50,270, while keeping your tax and NICs to just £4,260.

Here’s what that might look like:
– Salary of £12,570 with no income tax, but around £293 in employee NIC and £712 in employer NIC which helps protect your state benefits.
– Dividends of £37,700, £500 of which is tax-free using the dividend allowance, and 8.75% tax on £37,200 which equals £3,255.
– Total tax and NIC paid: £4,260*
– Take home pay of approximately £46,700* from a total income of £50,270.

*Simplified figures

Why This Strategy Works

Dividends aren’t subject to National Insurance, which is why a well-structured salary and dividend strategy for directors can be so tax-efficient. Splitting income between the two can lower your overall tax bill compared to taking the full amount as salary.

Other important considerations:
– Staying below the £60,000 threshold ensures you retain your full Child Benefit entitlement.
– Employment Allowance can reduce employer NIC by up to £10,500 but isn’t available if you’re the sole director on payroll. It can help if you have other employees, even temporarily.
– Employer NIC paid on salary is an allowable business expense, so it reduces your company’s taxable profits and corporation tax liability. For example, £712 NIC reduces your corporation tax bill by up to £178 (at 25% rate).

Tailoring your salary and dividend strategy

For many directors this is likely the most tax-efficient position. However it’s important to tailor remuneration to your individual circumstances. If you have other income streams such as rental income or pensions this can affect your overall tax position and the best strategy for you. It’s not a one-size-fits-all solution.

For tailored advice for your salary and dividend plan for 2025/26, speak to the GLX team today on 01603 671361 or email info@glx.co.uk

With the P11D reporting deadline 2025 fast approaching on 6th July and the 2024/25 tax year now closed, now is the time to make sure everything is in order.

If your business offers perks such as company cars, private medical cover, or director loans, these are classed as benefits in kind, and must be reported to HMRC as part of the P11D process.

Key points to consider:

• The value of any benefit is treated as taxable income for the employee or director and is usually taxed via an adjustment to their tax code.
• Employers must also submit a P11D(b) to report and pay Class 1A National Insurance at 13.8% on most taxable benefits.
• Payment of Class 1A NIC is due by 22nd July 2025 (or 19th July if paying by post).

The most common reportable benefits include:

• Company cars and fuel
• Mileage reimbursements above HMRC’s approved rates
• Director’s loans exceeding £10,000
• Private medical insurance

Benefits that have already been processed through payroll (if registered in advance) and trivial benefits within HMRC’s exemption rules don’t need to be reported.

Did you know that you can now choose to payroll certain benefits? This means adding them directly to employees’ payslips, reducing admin time, and eliminating the need for year-end P11D reports (though a P11D(b) is still required). Registration with HMRC must be completed before the start of the tax year.

From April 2026, payrolling benefits will become mandatory, which will replace most P11D reporting altogether, so preparing early for this change will help smooth the transition.

If you need help meeting the P11D reporting deadline 2025, understanding the changes, or implementing payrolling for benefits, contact our team today!

Early tax return preparation might not rank high on the “fun” list for most individuals and business owners, which makes it all too tempting to put off.

However, the benefits of being proactive are significant and often overlooked.

At GLX, we work proactively and encourage our clients to get ahead of the curve, and here’s why:

• More time to maximise allowances: When you start early, there’s time to properly assess your situation and ensure you’re not missing out on any deductions or reliefs that you’re entitled to.
• Less pressure, fewer mistakes: Last-minute submissions can lead to avoidable errors. Preparing early gives you the breathing space to prepare your records and get it right the first time.
• Faster refunds: If you’re owed money, submitting early means HMRC processes your return sooner. That can be a welcome boost to cash flow.
• Peace of mind: Getting ahead removes the stress of looming deadlines. You can focus on running your business or enjoying life, knowing it’s all under control.

Thinking about getting expert help with your tax returns? Whether you’re an individual or business owner, our team can guide you through early tax return preparation with ease.

Get in touch with the GLX team for a no-obligation chat about your circumstances, and how we can help you.

Q: How flexible is the outsourced Finance Director role? 

A: For many businesses, especially growing SMEs, flexibility in financial leadership is crucial — and this is where outsourcing shines.

An outsourced Finance Director (FD) offers significant flexibility that a full-time, in-house hire simply cannot match. Whether your business requires strategic input for a short-term project or ongoing part-time support, an outsourced FD can be engaged on terms that suit your needs.

This model allows you to adapt your financial management approach without the high cost and long-term commitment associated with full-time employees. It’s a scalable solution — giving you the ability to increase or decrease involvement based on your business’s current stage or challenges.

What adds to the flexibility is the broad range of services that an outsourced FD can provide. These include:

• Financial planning and forecasting
• Budgeting and cost control
• Cash flow management
• Financial reporting and analysis
• Strategic financial advice

You get high-level expertise tailored to your company’s specific requirements, all while maintaining cost-efficiency and operational agility. Whether you’re navigating growth, restructuring, or preparing for investment, this flexible arrangement ensures your financial leadership scales with you.

If you’re asking “how flexible is the outsourced Finance Director role”, the answer is: very. It’s a solution designed for adaptability — a smart, modern approach for businesses looking to optimise performance without sacrificing control or budget.

If you’d like to explore how an outsourced Finance Director could benefit your business, contact us for a free chat.

On March 26th, Chancellor Rachel Reeves unveiled the Spring 2025 Budget, responding to current economic challenges and outlining plans for the future.

We’ve outlined the key takeaways that may impact individuals, sole traders, and business owners.

Overall, The Spring 2025 Budget emphasises modernisation, compliance, and strategic reforms without dramatic tax rate changes.

Individuals, sole traders, and business owners must prepare for these developments, with ‘Making Tax Digital’ being the most important point here. We’ll be reaching out directly to all our clients affected, but if you’d like to get ahead of the game, we’d be happy to help you prepare for this change.

Take a look at some of the key takeaways:

No easing of business taxes:

The budget confirmed that increases to Employers’ National Insurance Contributions and other business taxes set to take

effect in April 2025 will not be eased. This means businesses will face increased costs, affecting pricing and wage decisions.

Making Tax Digital (MTD):

A phased rollout of Making Tax Digital for Income Tax will require sole traders and landlords with income over £20,000 to comply by April 2028. This includes mandatory quarterly digital updates and using MTD-compatible software. Affected individuals need to prepare for these changes and ensure they have the right tools in place.

Measures against tax avoidance: 

The government is taking a firm stance against marketed tax avoidance schemes. A new consultation aims to strengthen penalties for scheme promoters, enhance HMRC’s powers to combat tax evasion, and create a less permissive environment for such schemes. Individuals are encouraged to be cautious and ensure their tax practices align with legal requirements.

Revised behavioural penalties: 

HMRC is consulting on reforms to its penalties regime, focusing on simplifying the system and making penalties more proportionate. This aims to address inconsistencies in how errors in tax returns are penalised, particularly for honest mistakes, promoting a fairer approach to compliance.

Advance clearance for R&D tax claims: 

The budget proposes exploring advance clearances for Research and Development (R&D) tax claims. If implemented, businesses could obtain an upfront agreement from HMRC regarding eligibility for R&D relief, reducing the uncertainty and administrative burden associated with post-claim reviews.

Enhanced third-party data utilisation: 

HMRC plans to improve its data collection methods and use third-party data to enhance tax compliance. This may involve using earnings data from gig economy platforms and bank transaction insights to facilitate tax return processing and compliance checks.

If you have any questions about your finances or need assistance with your accounting, contact the team at GLX on 01603 617361 or email info@glx.co.uk

This month, millions of workers will take home more pay due to a reduction in the national insurance rate.

As announced by the chancellor, Jeremy Hunt, in November 2023, the main National Insurance rate for employees was reduced from 12% to 10% on 6 January 2024.

As an example:

On a salary of £30,000 an employee’s NIC per month was £174.30 at the original 12%, however from 6th January 2024 the new amount of £145.25 will be payable, saving £29.05 per month or £348.60 per year.

The self-employed will receive their reductions from April 2024 and we’ll be sharing more detail on this nearer the time. 

In the meantime, you can read the full details on the Government website:

https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-january-2024/a-reduction-in-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions-and-the-removal-of-the-requirement-to-pay-class-2-nation

HMRC’s Working Time Regulations were introduced on 1st January 2024, and as promised, the GLX payroll team are pleased to share these details with you.

The main aim of these changes is to simplify holiday entitlement and holiday pay calculations.

They will be particularly relevant for companies with zero/variable hour employees or part-year workers, such as term-time only workers.

It’s important to note that the reinstated 12.07% holiday calculation (based on 28 days of holiday) and rolled-up holiday calculations can only be used for holiday years that start after 1st April 2024. 

If your holiday year began on 1st January 2024, you’ll need to wait until January 2025 to implement and continue using your current method.

For full information, you can visit the following link: 

https://www.gov.uk/government/publications/simplifying-holiday-entitlement-and-holiday-pay-calculations/holiday-pay-and-entitlement-reforms-from-1-january-2024

If you would like to discuss this further, please don’t hesitate to get in touch.

The Government is proposing to introduce an accrual method to calculate entitlement at 12.07% of hours worked in a pay period for irregular-hour workers and part-year workers in the first year of employment and beyond.

Regular-hours workers, who know their hours, will continue to accrue annual leave in their first year of employment as they do now.

In addition, employers may be permitted to calculate holiday pay for irregular-hours workers and part-year workers using the old method of ‘Rolled Up Holiday Pay’ (RHP) which had previously been deemed as unlawful.

Workers will not be able to request that they receive RHP, it will be the employer’s choice and if used they will be required to calculate a worker’s holiday pay as 12.07% of the worker’s total earnings within a pay period. The employer will be required to pay the worker with each payslip, rather than when the leave is taken and the Government expects employers to clearly mark RHP payments as separate items on each payslip.

These proposals will affect companies whose new holiday year entitlement starts from 1st April 2024 onwards and GLX will be following the progress of these proposals.

You can read more about the proposed changes on the link below and for further information please don’t hesitate to get in contact with the payroll team at GLX to discuss how these changes may affect you and your business.

https://assets.publishing.service.gov.uk/media/654b64d0b9068c000d0e7546/retained_eu_law_explanatory_memorandum_the_employment_rights_regulations_2023.pdf