Spring 2009 Newsletter Content Oh for a little hindsight Can't pay, won't pay? Shock in Essex Car tax You signed it Don't be late Age before beauty? IHT and falling prices More paper Shopping around Less paper PAYE or not PAYE... Flat rate scheme A change of heart There are limits Do your duty Free lunch VAT a mess Dissatisfaction guaranteed Don't believe it! Too late Tax on tick £100 note Temp reminder

Dissatisfaction guaranteed It is common for directors to be required to sign guarantees on behalf of their companies - leases, borrowings, commercial agreements. In difficult times, it will be more common for the guarantees to be called in. Is there any tax relief? In a recent case, a former director had to pay £13,000 to a debt factoring company when the company failed. He put the expense on his self-assessment return as a deduction from salary. HMRC objected, and the Special Commissioner agreed with them - for several reasons, he could not enjoy income tax relief. Crucially, the expense was not incurred in the course of the employment because he had left office by the time the guarantee was called in. Besides, it was not "necessarily" incurred because not every director has to sign a guarantee. He could have a capital loss, but as he had no gains that would save him nothing. Unfortunately, guarantees are a fact of life for people in business. This case is a reminder that they won't necessarily produce a tax rebate if they are called in.