Lee Sharpe looks at potential strategies for optimising profit extraction for unincorporated family businesses.
Despite the coronavirus pandemic, some businesses are (thankfully) still making profits. It seems taxes are going to have to rise in order to repay the country’s enormous emergency borrowing.
Nevertheless, most business owners are unlikely to want to pay more tax than they must.
Key points for unincorporated businesses
From a tax perspective, family businesses that are not in a corporate entity are basically indistinguishable from the individual(s) who owns them (strictly, the legal treatment may differ for general partnerships operating under Scottish law, but the tax treatment essentially remains consistent with the rest of the UK).
The profits of the business are therefore taxed on whoever owns the
