"Dividend tax for a higher rate taxpayer is 32.5%...."
The OP mentioned utilising the client's PAs so one assumes that in this case there would be no HR liability (or it could easily be avoided via timing).
I can think of nothing that would prevent the making of a CT-disallowable pension contribution by a non-trading, non-dormant company. However I would challenge the wisdom of doing that from a tax-efficiency viewpoint. In effect the company "loses" 19% CT on the disallowed contributions. But, assuming that ER is due, if the company were put into members voluntary liquidation the client would pay just 10% (presumably after the CGT annual exemption, so probably only c9% net).
The dividend allowance is only £2k pa and so, unless there is absolutely no other income, any divis on top of that are probably going to be taxed at 7.5% anyway. I cannot see the advantage of paying this and (in effect) losing 19% on the company pension contribution. Once the money has been extracted via an MVL, there must surely be some other way of utilising the PAs from the income generated? Even before the pension income kicks in.
Ay any rate, all other options would need to be carefully weighed.
"If a car is 'available' for private use, then it is BIKable."
Absolutely correct. Unless, very exceptionally, private use is forbidden and does not ever take place - see EIM23400 (link below):
I acknowledge that the payment for p/u is probably in order to prevent a car fuel benefit from arising but, by the same token, if the driver currently pays for (even minimal) private use, it's hard to see how it could be argued that there is NO private use - even if the employer were to agree, which is probably unlikely.
As other posters have pointed out, the only realistic alternative to company car BIK is run your own. Hey Presto, BIK avoided. You then just have to buy your car, pay the loan/HP interest, tax and insure it, service/maintain it, accept the depreciation, etc, etc. BARGAIN!! IMHO, too many people get hung up about the tax they pay on a company car without working out whether they'd truly be better off without one.
Obviously, the decision becomes more finely balanced if there is a car cash alternative on offer but that is a separate discussion.
HMRC don't knowingly "allow" monetary payments to be included in a PSA. (They might "look the other way" if discovered post-event and the amount is not significant and, yes, I have seen that myself.) In truth, unless cash payments are discovered via an employer compliance visit, HMRC won't be any the wiser as the PSA Unit is merely a processing team.
If someone asks me "What is the legal limit on a motorway?", I tell them 70mph. If they ask "What can I get away with without a speeding ticket?" I might say 78mph. But 70 is the only bombproof answer.
As to "Why would they not?", well there at least two good reasons. The first is our old friend, cashflow: getting the money in the kitty up to 15 months earlier. The second is that if it goes thru payroll it attracts E'ees NICs, whereas E'ees NI is not charged in a PSA. That's the real reason why monetary payments are excluded.
As I've already posted, cash (= monetary) payments are simply NOT permitted within a PSA. HMRC has just withdrawn what was effectively a concessional treatment to include non-exec directors' reimbursed travel costs in a PSA for the same reason.
Anyway, why would you want to? A PSA will result in a gross-up. Putting it thru the payroll wouldn't.
You can't include monetary payments in a PSA. PSAs are purely for benefits IN KIND which are minor, irregular or difficult to apportion between a group of employees. Plus, as one poster has already stated, a PSA cannot be applied for re years prior to the most recent one (and even for the latter, must be before 6 July).
This is something that should have gone through payroll and been subject to PAYE and E'ers and E'ees NIs. In this situation (and as its not a director) THERE IS NO GROSSING UP.
A Voluntary disclosure should be made to the HMRC Employers Unit at Longbenton. An unprompted voluntary disclosure may well escape any penalty, provided it was not a 'deliberate' act, but merely a misunderstanding of the commuting costs rule.
We're not going to agree on this. Please note the following from the CCA 1974 Official Guidance:
Importantly, where the agreement is a non-commercial agreement (under section 74(1), CCA 1974), Part V largely does not apply. Therefore, in most cases of non-commercial employee loans, the onerous formalities required by Part V of the CCA 1974 described below can be dispensed with. Non-commercial agreements should cover transactions that are merely occasional (for more information, see Is a consumer credit licence required?).
Furthermore, interest has to be charged to require a Consumer Credit licence. As I read it, the Act doesn't apply (or I should say a licence isn't required) as regards interest-free loans.
I still disagree. Under the CTW scheme the bike is owned by the employer and so is being HIRED to the employee. That makes it more like HP, not a loan.
Don't agree. Would make all director/employee loans technically illegal then! Not researched it in depth but I would expect the consumer credit rules apply to consumers (= customers), not non-consumers, such as employees!
Whilst there has been an interesting (if not terribly illuminating) debate in this forum about the valuation of minority shareholdings in a private company, I think, with respect, quite a bit of this has been rather "off-piste". The original query was:
"...should any further discount be applied to recognise the fact that the specific shares in question are "B Class Shares?"
The answer is, quite simply, No. The B shares rank pari passu with the A shares and so would not be valued any differently to the A shares. The actual class of the share is irrelevant; only the underlying rights matter.
Apart from preference shares, no shares carry an automatic right to dividends and, personally, and especially given the size of the holdings in question, I do not see that the dividend history would carry much (if any) weight in a share valuation.