HM Revenue & Customs have recently announced changes to the way the extra statutory concession, ESC C16, will work from March 2012.
Here’s a link explaining those changes and discussing some of the detail. And here’s a note from the ICAEW’s tax facility about the apparent conflict between the ESC C16 and Company law.
In practice, if your client needs to extract under £25,000 from his company, you should seriously think about using the extra-statutory concession, as it’s a cheap way of doing things. If your client needs to extract more than £25,000 the decision becomes more difficult, and a members voluntary liquidation may be needed. In every case, expert advice should sought as tax is often not the only issue which could determine the most appropriate route.
