adding cash to business account - tax implications

[whirly]

Using basic figures, say i start a business with £100 in my business account. Half-way through the year i decide to top up my account by £50 to buy extra stock. Are there any tax implications doing this ? I heard a rumour that there are certain tax codes that have to be paid on top of the total. Do you need to pay extra tax or is it ignored.

Thank you

[Joyous]

Hi Whirly

You have been misinformed. You pay tax on how much profit your business makes, not on how much capital you put in. It’s probably worth your while checking out the guide (http://www.hmrc.gov.uk/helpsheets/ir222.pdf) on the Inland Revenue's website to get an idea of how tax works.

Regards

Joy

[whirly]

thanks