1. Using the company as a personal bank account
It’s a really common one. Unplanned withdrawals can create an overdrawn Director’s Loan Account.
🔴 Potential 35.75% Section 455 tax charge
🔴 Possible Benefit in Kind implications
How to avoid it: Pay yourself a set salary/dividend and stick to it. Pay back any overdrawn director loans before 9 months after your year end.
2. No clear plan for paying yourself
Salary vs dividends vs pension isn’t always obvious — but it matters. Without a plan:
🔴 Tax bands get used inefficiently
🔴 Allowances can be missed
How to avoid it: Review your pay mix at least once a year (ideally before year-end).
3. Leaving VAT registration too late
Often ignored… until it isn’t.
🔴 Late registration risks
🔴 Backdated VAT bills
🔴 Wrong scheme used
How to avoid it: Track your rolling 12-month turnover monthly.
4. Mixing up cash and profit
Money in ≠ money kept.
🔴 VAT isn’t yours
🔴 Tax still needs setting aside
🔴 Timing matters
How to avoid it: Set aside a % of income for tax as you go.
5. Getting caught out by IR35
It’s not always as simple as “they are self-employed so they invoice us”.
🔴 HMRC looks at the real working relationship
🔴 Not just the contract
How to avoid it: Review subcontractor roles early — not after they’ve been working with you for months. HMRC have an online tool to check if a subcontractor is likely to be classed as an employee.
Most tax issues don’t come from doing things wrong on purpose — happen when the business grows and the financial side hasn’t quite caught up yet.
If you’re not 100% confident things are set up right – that’s usually the moment to check.
At Jupps Accountants, we have extensive experience with helping businesses grow and take pride in getting it right for you. Get in touch.