Family-owned businesses may be able to use an Autumn Statement initiative to delay corporation tax payments and boost their cash flow.
Currently, many family-owned companies have to pay their tax in quarterly instalments where they are classified as being under common ownership — for example, one company owned by a husband and another by his wife could be caught by this rule, which also applies for civil partnerships.
However, from April 2015 such firms may be able to pay their tax nine months after the end of their tax year — as long as their companies are not directly linked within a group.
The Chancellor also confirmed plans to shut down a tax loophole exploited by business owners who lent money to their own company.
Using the complex “transfer pricing” rules, owners of SMEs have been able to secure a one-sided tax deduction for their company without having to recognise any taxable income on their own tax return.
