The document discusses the changes to dividend taxation for the 2016/17 tax year, including the introduction of a £5,000 dividend allowance and new dividend tax rates of 7.5% for dividends within the basic tax band and 32.5% for dividends above the basic tax band. It analyzes two options for salary and dividend levels, recommending taking a salary up to the primary National Insurance threshold of £8,060 and the rest as dividends as it provides slightly higher take home pay and lower corporation tax costs compared to the alternative.
Traditionally, this is the time at which we recommend you take stock of tax and-finance for you, your family, and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position.
Some planning points this year-reflect the impact of the pandemic.
Here is a detailed guide for year-end tax planning.
The new tax rules will restrict tax relief on finance costs for residential landlords to the basic rate of income tax from April 2017. Currently, landlords can deduct all finance costs such as mortgage interest from their rental income. Under the new rules, relief will be restricted gradually over four years until 2020/21 when all financing costs can only be claimed as a basic rate tax reduction. This is likely to increase the tax liability for many residential landlords. The changes may also impact other areas such as eligibility for child benefit due to an increase in adjusted net income. Professional advice should be sought to understand the implications and consider options to reduce income where applicable.
Horner Downey & Co Year End 2017-18 NewsletterJenny Ferguson
This document provides information and advice about ways to reduce taxes before the end of the 2017/18 tax year on April 5th, including maximizing personal tax allowances, reviewing company car arrangements, taking business profits tax-efficiently, considering retirement planning options, and utilizing savings vehicles like ISAs. It also notes upcoming tax changes in 2018/19 such as reductions to the dividend allowance and increases to tax rates on company cars.
The document provides guidance on setting up and running a limited company. It discusses key steps like company registration, opening a bank account, registering for VAT and corporation tax, and setting up payroll (PAYE). It also covers expenses, insurance, invoicing, deadlines, paying dividends, IR35 rules, and tax returns. Regarding salaries, it recommends paying at least the NIC threshold of £8,060 or the national minimum wage rate of around £13,000 annually.
The document summarizes upcoming changes to the taxation of dividend income in the UK, which will abolish the dividend tax credit and introduce a £5,000 tax-free dividend allowance. It provides examples of how various individual taxpayers and business owners would be impacted. For individuals receiving dividends over £5,000, they will pay an effective 7.5% tax on dividends instead of the previous 0% for basic rate taxpayers. Business owners taking a combination of salary and dividends will be slightly worse off. The changes may also increase taxes for discretionary trusts that receive dividends.
Another tax year has started and, as always in the world of tax, nothing stays the same. There are a number of methods of
extracting funds from your own limited company and in this Briefing we consider the main options for extracting profit.
- When starting a limited company, you must register it with Companies House by providing information such as the company name and directors, and creating documents like a memorandum of association.
- As a limited company, it is important to understand the legal status and maintain proper accounts, which includes filing corporate tax returns. You must report pay and dividends as well as the statement of comprehensive income.
- The taxable profits of the limited company are subject to corporation tax, which involves filing a corporate tax return with HMRC by certain deadlines. It is important to comply with all filing requirements for limited companies.
Traditionally, this is the time at which we recommend you take stock of tax and-finance for you, your family, and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position.
Some planning points this year-reflect the impact of the pandemic.
Here is a detailed guide for year-end tax planning.
The new tax rules will restrict tax relief on finance costs for residential landlords to the basic rate of income tax from April 2017. Currently, landlords can deduct all finance costs such as mortgage interest from their rental income. Under the new rules, relief will be restricted gradually over four years until 2020/21 when all financing costs can only be claimed as a basic rate tax reduction. This is likely to increase the tax liability for many residential landlords. The changes may also impact other areas such as eligibility for child benefit due to an increase in adjusted net income. Professional advice should be sought to understand the implications and consider options to reduce income where applicable.
Horner Downey & Co Year End 2017-18 NewsletterJenny Ferguson
This document provides information and advice about ways to reduce taxes before the end of the 2017/18 tax year on April 5th, including maximizing personal tax allowances, reviewing company car arrangements, taking business profits tax-efficiently, considering retirement planning options, and utilizing savings vehicles like ISAs. It also notes upcoming tax changes in 2018/19 such as reductions to the dividend allowance and increases to tax rates on company cars.
The document provides guidance on setting up and running a limited company. It discusses key steps like company registration, opening a bank account, registering for VAT and corporation tax, and setting up payroll (PAYE). It also covers expenses, insurance, invoicing, deadlines, paying dividends, IR35 rules, and tax returns. Regarding salaries, it recommends paying at least the NIC threshold of £8,060 or the national minimum wage rate of around £13,000 annually.
The document summarizes upcoming changes to the taxation of dividend income in the UK, which will abolish the dividend tax credit and introduce a £5,000 tax-free dividend allowance. It provides examples of how various individual taxpayers and business owners would be impacted. For individuals receiving dividends over £5,000, they will pay an effective 7.5% tax on dividends instead of the previous 0% for basic rate taxpayers. Business owners taking a combination of salary and dividends will be slightly worse off. The changes may also increase taxes for discretionary trusts that receive dividends.
Another tax year has started and, as always in the world of tax, nothing stays the same. There are a number of methods of
extracting funds from your own limited company and in this Briefing we consider the main options for extracting profit.
- When starting a limited company, you must register it with Companies House by providing information such as the company name and directors, and creating documents like a memorandum of association.
- As a limited company, it is important to understand the legal status and maintain proper accounts, which includes filing corporate tax returns. You must report pay and dividends as well as the statement of comprehensive income.
- The taxable profits of the limited company are subject to corporation tax, which involves filing a corporate tax return with HMRC by certain deadlines. It is important to comply with all filing requirements for limited companies.
34565 Finance Bill Update flyer Jan 2017Tony Nevin
The document summarizes upcoming changes to optional remuneration arrangements under UK tax law. Beginning April 2017, salary sacrificed amounts for benefits will be taxed based on the higher of the sacrificed amount or benefit value. Exemptions include pension contributions, childcare vouchers, and ultra-low emission company cars. Employers must review existing benefit programs, consider changes to remain advantageous, and communicate changes to employees who may be financially impacted.
Horner Downey & Co Year End Strategies NewsletterJenny Ferguson
The document discusses strategies for business owners to reduce taxes in the current tax year before the deadline of April 5th, 2018. It focuses on reviewing company car policies given rising tax percentages, and considering paying employees for business miles instead of providing a company car. It also discusses extracting profit from a business in a tax-efficient manner through dividends versus salary/bonuses given changes to dividend tax rates, and other options like incorporation or pension contributions.
This factsheet discusses various tax-saving strategies that individuals and businesses can implement before the 2018/19 tax year ends on 5 April 2019. It recommends making full use of available personal and child allowances and tax-free savings opportunities. Specific tips include transferring income between spouses, employing children in the family business, contributing to pensions, using ISAs and charitable donations. The factsheet also provides tips for family companies such as utilizing personal allowances and dividends to extract profit in a tax-efficient manner. Proper timing of salary, bonus and dividend payments is emphasized.
Year-End Tax and Financial Planning by myStockOptions.comBruce Brumberg
This presentation provides a timely overview of year-end financial-planning and tax topics for stock compensation, including points of importance for employee education and for financial advisors. Special attention is given to issues involving tax-rate increases. While each annual edition features planning concerns specific to that year-end, the general ideas presented here are perennially useful.
Accountants, are you ready for the US?
In the United States, the fiscal powers of taxation is based on three levels: federal, state and municipal. The federal income tax, in particular, is a pay-as-you-go tax.
From November 7 to 10, the Italian accountants will stay in New York city, on a mission in the US. We went to look around the contents by the IRS (Inland Revenue Service) in the field of “Tax Withholding and Estimated Tax”, for use in 2016.
The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay-as-you-go: Tax Withholding and Estimated Tax.
This chapter discusses sales taxes in Canada, including:
- GST (Goods and Services Tax) of 5% and HST (Harmonized Sales Tax) of 13% which combines GST and PST.
- PST (Provincial Sales Tax) rates that vary by province.
- How to calculate, record, and remit GST/HST charged on sales and GST/HST and PST paid on purchases and expenses.
- The accounts used to track sales tax liabilities (GST Payable, HST Payable, PST Payable) and input tax credits (GST-ITC, HST-ITC).
HUSC 3366 Chapter 3 Taxes in Your Financial PlanRita Conley
The document discusses various topics related to taxes and financial planning. It covers the four main types of taxes: taxes on purchases, property, wealth, and earnings. It also discusses how to calculate taxable income and federal income tax liability. This includes determining deductions, exemptions, and tax credits. The document provides an overview of tax planning strategies individuals can use to reduce their tax burden.
The document provides an overview of the 2010 healthcare reform legislation and subsequent tax law changes. It notes that the legislation was passed in two parts in 2010, containing provisions such as a small business tax credit for offering health coverage, elimination of lifetime caps on insurance, and penalties for remaining uninsured beginning in 2014. The summary also outlines numerous tax law provisions from 2010-2018 related to health savings accounts, deductions, credits, fees and more.
- Corporate tax rates range from 15% to 39% depending on taxable income, with eight tax brackets. Corporations with income over $18.33 million pay a flat 35% rate.
- Qualified personal service corporations such as architectural firms are taxed at a flat 35% rate.
- For a corporation with $300,000 in taxable income, the tax liability would be $100,250 normally, but $105,000 if it was a qualified personal service corporation.
This document provides an overview of tax and financial strategies for both businesses and individuals for the 2017/18 tax year. It discusses key changes such as the new Lifetime ISA and changes to inheritance tax rules. For businesses, it outlines strategies for starting a new venture, choosing a business structure, claiming deductible expenses and capital allowances, and involving family members. It recommends contacting the accounting firm for specific tax advice tailored to individual circumstances.
The document discusses various strategies for owner-managers to compensate themselves from their businesses, including paying themselves a salary, declaring dividends, taking draws or loans from the corporation, and splitting income with family members. It explains the tax implications of different compensation methods like salaries, dividends, and loans. Strategies covered include setting up a payroll to pay salaries, issuing different classes of shares to family members, establishing profit sharing and pension plans, and using a private health services plan.
Join us to learn more about how tax reform impacts nonprofits across the industry. By Congress approving the H.R. 1 Tax Cuts and Jobs Act, it significantly alters the U.S. tax code.
Although software takes care of the personal allowance in the most tax-efficient manner, it is vital to understand the basics of the personal allowance. For the tax year, 2020/21 software is going to take care of the personal allowance. Still, an understanding of the personal allowance is helpful when planning the next tax year.
The annual allowance is a limit on the amount that can be contributed to your pension each year, while still receiving tax relief. The annual allowance is used up through gross pension contributions from you or your employer.
The amount will depend on your earnings; the rule is that you’ll get tax relief on pension contributions of up to 100% of your earnings or a £40,000 annual allowance, whichever is lower.
The Affordable Care Act introduces several new taxes and tax credits related to health insurance. It requires most individuals to have health insurance through state-run exchanges or pay a penalty. It also requires employers with 50 or more employees to offer affordable coverage or pay penalties. New taxes include a 0.9% Medicare surtax on wages over $200,000 and a 3.8% tax on investment income over $200,000. Individuals between 100-400% of the poverty level qualify for premium tax credits. Small businesses with under 25 employees averaging less than $50,000 in wages can receive up to a 50% tax credit for contributing to employee health insurance.
The document provides information on end of year tax planning for 2011-2012, including opportunities to minimize tax liabilities before the April 5, 2012 deadline. It discusses the current tax landscape and increased efforts by HMRC to crack down on avoidance and evasion. Specific personal and business tax planning strategies are also outlined, such as income shifting between couples, pension contributions for over-65s, employing family members, and extracting profits from companies through salaries, dividends, or bonuses.
From April 2011, significant changes will be made to the UK's PAYE tax withholding system. A new D1 tax code will apply a 50% tax rate to very high secondary incomes. Real-time reporting of payroll information to HMRC will begin rolling out in 2012. National insurance contribution thresholds will increase substantially and rates will rise slightly. Various pension contribution limits and rules will also be changing in upcoming years. Employers should review systems and software to prepare for these PAYE and reporting changes.
O documento é uma metáfora que compara a vida a um barco. Ele diz que Deus nos deu esse "barco" chamado vida e que cabe a nós guiá-lo da melhor maneira possível, enfrentando tempestades e calmaria. Na noite, Jesus passará por todos os "cais" para ajudar aqueles que quiserem uma nova vida, basta orar e entregar a Deus todas as ansiedades e problemas. A vida trará altos e baixos, mas Jesus estará sempre como a luz para iluminar o caminho.
The document discusses hydrolized horse placenta extracts produced by Korea Natural PLC. It describes that the extracts are derived from placentas sourced from Jeju Island, which are rare. It notes the extracts contain over twice the amino acid content of pig placenta and have various active ingredients like growth factors and vitamins. The document outlines the extracts' efficacy for anti-aging and conditions like atopic dermatitis, and their medical actions like boosting immunity and blood circulation.
The front cover of the album features a close-up shot of the lead singer surrounded by other band members in the background. Muted colors like light blue, brown, and white are used to imply the album contains calm, composed songs rather than dance songs. The band members wear black, suggesting simplicity and authority. The back cover continues the color scheme and vintage style. It depicts two hands together, representing unity and strength. Industry information and a barcode are also included as required.
34565 Finance Bill Update flyer Jan 2017Tony Nevin
The document summarizes upcoming changes to optional remuneration arrangements under UK tax law. Beginning April 2017, salary sacrificed amounts for benefits will be taxed based on the higher of the sacrificed amount or benefit value. Exemptions include pension contributions, childcare vouchers, and ultra-low emission company cars. Employers must review existing benefit programs, consider changes to remain advantageous, and communicate changes to employees who may be financially impacted.
Horner Downey & Co Year End Strategies NewsletterJenny Ferguson
The document discusses strategies for business owners to reduce taxes in the current tax year before the deadline of April 5th, 2018. It focuses on reviewing company car policies given rising tax percentages, and considering paying employees for business miles instead of providing a company car. It also discusses extracting profit from a business in a tax-efficient manner through dividends versus salary/bonuses given changes to dividend tax rates, and other options like incorporation or pension contributions.
This factsheet discusses various tax-saving strategies that individuals and businesses can implement before the 2018/19 tax year ends on 5 April 2019. It recommends making full use of available personal and child allowances and tax-free savings opportunities. Specific tips include transferring income between spouses, employing children in the family business, contributing to pensions, using ISAs and charitable donations. The factsheet also provides tips for family companies such as utilizing personal allowances and dividends to extract profit in a tax-efficient manner. Proper timing of salary, bonus and dividend payments is emphasized.
Year-End Tax and Financial Planning by myStockOptions.comBruce Brumberg
This presentation provides a timely overview of year-end financial-planning and tax topics for stock compensation, including points of importance for employee education and for financial advisors. Special attention is given to issues involving tax-rate increases. While each annual edition features planning concerns specific to that year-end, the general ideas presented here are perennially useful.
Accountants, are you ready for the US?
In the United States, the fiscal powers of taxation is based on three levels: federal, state and municipal. The federal income tax, in particular, is a pay-as-you-go tax.
From November 7 to 10, the Italian accountants will stay in New York city, on a mission in the US. We went to look around the contents by the IRS (Inland Revenue Service) in the field of “Tax Withholding and Estimated Tax”, for use in 2016.
The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay-as-you-go: Tax Withholding and Estimated Tax.
This chapter discusses sales taxes in Canada, including:
- GST (Goods and Services Tax) of 5% and HST (Harmonized Sales Tax) of 13% which combines GST and PST.
- PST (Provincial Sales Tax) rates that vary by province.
- How to calculate, record, and remit GST/HST charged on sales and GST/HST and PST paid on purchases and expenses.
- The accounts used to track sales tax liabilities (GST Payable, HST Payable, PST Payable) and input tax credits (GST-ITC, HST-ITC).
HUSC 3366 Chapter 3 Taxes in Your Financial PlanRita Conley
The document discusses various topics related to taxes and financial planning. It covers the four main types of taxes: taxes on purchases, property, wealth, and earnings. It also discusses how to calculate taxable income and federal income tax liability. This includes determining deductions, exemptions, and tax credits. The document provides an overview of tax planning strategies individuals can use to reduce their tax burden.
The document provides an overview of the 2010 healthcare reform legislation and subsequent tax law changes. It notes that the legislation was passed in two parts in 2010, containing provisions such as a small business tax credit for offering health coverage, elimination of lifetime caps on insurance, and penalties for remaining uninsured beginning in 2014. The summary also outlines numerous tax law provisions from 2010-2018 related to health savings accounts, deductions, credits, fees and more.
- Corporate tax rates range from 15% to 39% depending on taxable income, with eight tax brackets. Corporations with income over $18.33 million pay a flat 35% rate.
- Qualified personal service corporations such as architectural firms are taxed at a flat 35% rate.
- For a corporation with $300,000 in taxable income, the tax liability would be $100,250 normally, but $105,000 if it was a qualified personal service corporation.
This document provides an overview of tax and financial strategies for both businesses and individuals for the 2017/18 tax year. It discusses key changes such as the new Lifetime ISA and changes to inheritance tax rules. For businesses, it outlines strategies for starting a new venture, choosing a business structure, claiming deductible expenses and capital allowances, and involving family members. It recommends contacting the accounting firm for specific tax advice tailored to individual circumstances.
The document discusses various strategies for owner-managers to compensate themselves from their businesses, including paying themselves a salary, declaring dividends, taking draws or loans from the corporation, and splitting income with family members. It explains the tax implications of different compensation methods like salaries, dividends, and loans. Strategies covered include setting up a payroll to pay salaries, issuing different classes of shares to family members, establishing profit sharing and pension plans, and using a private health services plan.
Join us to learn more about how tax reform impacts nonprofits across the industry. By Congress approving the H.R. 1 Tax Cuts and Jobs Act, it significantly alters the U.S. tax code.
Although software takes care of the personal allowance in the most tax-efficient manner, it is vital to understand the basics of the personal allowance. For the tax year, 2020/21 software is going to take care of the personal allowance. Still, an understanding of the personal allowance is helpful when planning the next tax year.
The annual allowance is a limit on the amount that can be contributed to your pension each year, while still receiving tax relief. The annual allowance is used up through gross pension contributions from you or your employer.
The amount will depend on your earnings; the rule is that you’ll get tax relief on pension contributions of up to 100% of your earnings or a £40,000 annual allowance, whichever is lower.
The Affordable Care Act introduces several new taxes and tax credits related to health insurance. It requires most individuals to have health insurance through state-run exchanges or pay a penalty. It also requires employers with 50 or more employees to offer affordable coverage or pay penalties. New taxes include a 0.9% Medicare surtax on wages over $200,000 and a 3.8% tax on investment income over $200,000. Individuals between 100-400% of the poverty level qualify for premium tax credits. Small businesses with under 25 employees averaging less than $50,000 in wages can receive up to a 50% tax credit for contributing to employee health insurance.
The document provides information on end of year tax planning for 2011-2012, including opportunities to minimize tax liabilities before the April 5, 2012 deadline. It discusses the current tax landscape and increased efforts by HMRC to crack down on avoidance and evasion. Specific personal and business tax planning strategies are also outlined, such as income shifting between couples, pension contributions for over-65s, employing family members, and extracting profits from companies through salaries, dividends, or bonuses.
From April 2011, significant changes will be made to the UK's PAYE tax withholding system. A new D1 tax code will apply a 50% tax rate to very high secondary incomes. Real-time reporting of payroll information to HMRC will begin rolling out in 2012. National insurance contribution thresholds will increase substantially and rates will rise slightly. Various pension contribution limits and rules will also be changing in upcoming years. Employers should review systems and software to prepare for these PAYE and reporting changes.
O documento é uma metáfora que compara a vida a um barco. Ele diz que Deus nos deu esse "barco" chamado vida e que cabe a nós guiá-lo da melhor maneira possível, enfrentando tempestades e calmaria. Na noite, Jesus passará por todos os "cais" para ajudar aqueles que quiserem uma nova vida, basta orar e entregar a Deus todas as ansiedades e problemas. A vida trará altos e baixos, mas Jesus estará sempre como a luz para iluminar o caminho.
The document discusses hydrolized horse placenta extracts produced by Korea Natural PLC. It describes that the extracts are derived from placentas sourced from Jeju Island, which are rare. It notes the extracts contain over twice the amino acid content of pig placenta and have various active ingredients like growth factors and vitamins. The document outlines the extracts' efficacy for anti-aging and conditions like atopic dermatitis, and their medical actions like boosting immunity and blood circulation.
The front cover of the album features a close-up shot of the lead singer surrounded by other band members in the background. Muted colors like light blue, brown, and white are used to imply the album contains calm, composed songs rather than dance songs. The band members wear black, suggesting simplicity and authority. The back cover continues the color scheme and vintage style. It depicts two hands together, representing unity and strength. Industry information and a barcode are also included as required.
Este documento presenta el programa anual de inglés para el cuarto grado en el año 2016 de una escuela. Contiene once secciones que describen los datos generales, la fundamentación del área, los ejes y contenidos curriculares, valores, componentes, calendario, competencia, estrategias metodológicas, evaluación, recursos, bibliografía y tres unidades de aprendizaje.
El documento discute la importancia del compromiso y cómo Miguel Ángel es un ejemplo de compromiso a través de su dedicación al arte. A pesar de que no estaba interesado inicialmente en el proyecto de la Capilla Sixtina, su compromiso lo llevó a completar el proyecto y superar las expectativas, ganándose más encargos del Vaticano y marcando un impacto en la comunidad artística. El documento también cita varias frases que enfatizan cómo el compromiso da fuerza y cómo los actos, no las palabras, demuestran el ver
The Chromeleon 7 Chromatography Data System provides powerful yet easy-to-use functionality for chromatographic data analysis from sample to result. It features an intuitive interface, automated workflows, powerful data analysis tools, and reporting capabilities to improve productivity in single or enterprise laboratories.
El documento hace una lista de amigos cercanos del autor, tanto de la escuela primaria como en la actualidad, a quienes agradece por brindarle alegría y amistad a lo largo de los años.
Legal Entity Risk and Counter-Party Exposure April 2016bfreeman1987
Legal entity risk and exposure has become an important issue for financial institutions. This solution aggregates data from multiple internal systems to determine exposure to any given counterparty or legal entity. It identifies issuers and instruments, calculates current exposure values, and monitors public data sources for risk events. The solution detects potential risk events, identifies affected instruments and issuers, and determines exposure to help organizations respond rapidly.
What is an Enterprise Information Model? Bram Wessel
An enterprise information model is a set of taxonomies, metadata, content types, and relationships that define how information is organized across multiple business units, systems, channels, and workflows within an organization. While an information model already implicitly exists in any enterprise, intentionally developing one provides benefits like organizational alignment and treating information as a key corporate asset, whereas ignoring it risks inconsistencies. Successfully managing an enterprise information model requires long-term commitment, governance, and understanding each organization's unique business context.
El documento presenta un modelo de directiva para el cierre contable de una entidad pública. El modelo incluye los objetivos, alcance, base legal, definiciones y lineamientos para la elaboración y presentación de los estados financieros y presupuestarios requeridos para el cierre contable. Se definen los rubros del activo corriente y no corriente, así como del pasivo corriente y no corriente para la presentación del estado de situación financiera.
Horner Downey and Company Spring 2017 NewsletterJenny Ferguson
The document discusses upcoming changes to the UK's VAT flat rate scheme. Beginning in April 2017, a new 16.5% flat rate will apply to businesses classified as "limited cost traders," defined as those that spend less than 2% of their VAT-inclusive turnover on goods in an accounting period. Certain benefits, like pension contributions and ultra-low emission vehicles, will be exempt from changes removing tax advantages from salary sacrifice schemes. Employers and employees may need to rethink current salary sacrifice arrangements due to the rule changes.
Traditionally, this is the time at which we recommend you take stock of tax and finance for you, your family and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position. Some planning points this year reflect the impact of the pandemic.
lease be assured that we are always on hand to advise and keep you up to date with tax and finance measures as they unfold. Throughout this publication, the term spouse includes a registered civil partner. We have used the rates and allowances for 2020/21.
My 10 minute presentation at BNI Camberley in April 2013 that covers all aspects of Fuller Spurling's work and includes some worked examples of how we can advise clients on the tax implications of their decisions
Our summer newsletter's cover articles look at planning for the reduction in the dividend allowance and highlight that another tax rise will be with us soon. Check out these articles and lots more!
Our Budget Summary is now available and provides a detailed breakdown of all of the key measures included in Wednesday’s Budget, as well as highlighting other measures announced in earlier Budgets which come into play from 6 April 2017.
Horner downey and company ltd year end strategiesJenny Ferguson
The document discusses strategies for business owners to reduce taxes in the current tax year before the deadline of April 5th, 2018. It focuses on reviewing company car policies given rising tax percentages, and considering paying employees for business miles instead of providing a company car. It also discusses extracting profit from a business in a tax-efficient manner through dividends versus salary/bonuses given changes to dividend tax rates, and other options like incorporation or pension contributions.
Horner Downey & Co Year End Strategies NewsletterJenny Ferguson
The document discusses various tax planning strategies that can be implemented before 5 April 2018 to reduce tax liabilities. It recommends reviewing business motoring strategies as company cars may not always be the most tax-efficient option. It also suggests maximizing the use of personal allowances across a family, utilizing tax advantaged savings schemes like ISAs and pensions, and considering different methods of extracting profit from a business in a tax efficient manner like dividends. The document is aimed at helping clients identify areas to improve their financial planning and tax position before the end of the tax year.
Horner downey and company ltd ye 201718Sarah Davies
The document discusses various tax planning strategies that can be implemented before 5 April 2018 to reduce tax liabilities. It recommends reviewing business motoring strategies as company cars may not always be the most tax-efficient option. It also suggests maximizing the use of personal tax allowances across a family, extracting profits from a business in a tax-efficient manner such as through dividends, and contributing more to pension funds to benefit from tax relief. The document provides information on the annual ISA allowance and the new Lifetime ISA. It stresses the importance of ongoing tax planning throughout the year.
This document provides information about pay and pay calculations including defining key terms like gross pay, net pay, deductions, PAYE, and overtime pay. It explains how deductions like taxes and National Insurance contributions are calculated and taken out of gross pay to determine net pay. Payslips and tax codes are also described. Specific payroll terms and calculations like sick pay, student loans, minimum wage, and self-employment are summarized. Documentation provided to employees like P45 and P60 forms are mentioned. Different types of bank accounts for handling income including current accounts, packaged accounts, and savings accounts are briefly outlined.
The 2016 UK budget document outlines several key points:
1) Personal tax allowances and income thresholds will increase for 2017/18, including the personal allowance rising to £11,500 and the higher rate threshold increasing to £45,000.
2) A new Lifetime ISA will be introduced in 2017 for under-40s to save for retirement or a first home, with a 25% government bonus on contributions of up to £4,000 per year.
3) The annual ISA subscription limit will rise to £20,000 and ISA tax benefits will continue during estate administration periods.
This document provides an overview of tax and national insurance regulations in the UK. It discusses income tax rates and personal allowances, as well as common tax codes. National insurance is paid to receive state benefits and rates vary depending on employment status. The document also covers topics like tax years, tax-free thresholds, and forms like P45 and P46.
The budget changes will negatively impact entrepreneurial family businesses. Specifically, changes to dividend tax rates will make a family earning £80,000 in business profits and taking £30,000 in dividends each worse off by £3,750 per year. While corporation tax rates are being cut slightly over the next two years, this will provide little relief compared to the increased tax burden on dividends. The changes leave this family wondering if they can afford to have a third child given the reduction in their disposable income of £312.50 per month.
This document provides six tax-saving tips for businesses:
1. Choose the optimal business structure to minimize tax liability based on level of profits.
2. Carry business losses forward to offset against future profits or other income sources.
3. Claim deductions for tax-deductible business expenses incurred close to the fiscal year-end.
4. Maximize claims for capital allowances on business equipment and machinery purchases.
5. Reclaim input VAT on fuel costs for business travel if employees are reimbursed.
6. Review company vehicle arrangements to optimize tax efficiency.
The document discusses key concepts related to accounting for income taxes, including temporary vs permanent differences, deferred tax assets and liabilities, valuation allowances, loss carrybacks and carryforwards, and intraperiod tax allocation. Temporary differences between book and tax income can result in future taxable or deductible amounts, creating deferred tax liabilities or assets. The enacted tax rate is used to calculate deferred tax amounts, which are presented on the balance sheet. A valuation allowance may reduce the deferred tax asset if future taxable income is uncertain. Loss carrybacks and carryforwards allow losses to offset past or future taxable income. Total tax expense must be allocated to income statement line items.
This document summarizes several topics from a newsletter:
1) It introduces Investors' Relief, which provides a 10% capital gains tax rate for investments in unlisted trading companies held for at least 3 years, similar to Entrepreneurs' Relief. Investors' Relief may benefit non-working investors and companies seeking capital as an alternative to EIS/SEIS.
2) It outlines the key eligibility criteria for Investors' Relief, including requirements for the shares, holding period, and that the shares must be newly issued.
3) It notes that while Investors' Relief and Entrepreneurs' Relief are similar, Investors' Relief is designed for non-working investors rather than shareholders
The document discusses the differences between capital and revenue expenditures for property letting businesses. Revenue expenditures are day-to-day expenses like repairs and maintenance that can be claimed as allowable deductions to reduce taxable profits. Capital expenditures are purchases or improvements that cannot be deducted but may qualify for capital allowances to reduce tax liability over time. Examples of capital expenditures include property extensions, renovations, and furniture purchases. The document provides guidance on determining whether various costs should be treated as capital or revenue to maximize tax benefits.
Tax Year End Planning Newsletter January 2016Jonathan Snee
This newsletter discusses upcoming tax changes and year-end planning opportunities. Key points include:
- The lifetime pension allowance is decreasing from £1.25m to £1m, which may trigger tax charges for those over the limit. Advice is recommended to evaluate protections.
- Higher earners may face a reduced £10,000-£40,000 annual pension allowance due to tapering based on income. Carry forward of unused allowance is still possible.
- There is an opportunity this tax year to contribute up to an additional £40,000 to pensions tax-effectively due to input periods. Seeking advice is recommended to understand eligibility.
- Future pension tax relief reductions may be coming
Turner Little discuss: What Do New Tax Changes Mean for Small Businesses Turner Little
April 2016 signalled the beginning of a new tax year, meaning that a wide range of government changes to UK tax policy have now come into effect. Turner Little explains the key tax changes small businesses should be aware of heading into the new fiscal tax year.
Advanced Financial Acct-I Chap 1-6 .pptxYasin Abdela
This document discusses accounting for share-based payment transactions under IFRS 2. It covers the objective and scope of IFRS 2, which is to require entities to recognize share-based payments in their financial statements. It addresses equity-settled, cash-settled, and transactions where the entity has a choice of settlement. Key terms like share-based payment transaction and fair value are defined. It also discusses arguments against recognition but notes the IASB rejected these. Recognition and measurement of equity-settled and cash-settled transactions are covered at a high level.
Top tax saving tips for small businessesPractice Eye
1. The document provides 13 tips for small businesses to save on taxes, including claiming expenses for items purchased before starting a business as a sole trader, withdrawing earnings of up to £38,474 from a limited company without paying additional income tax or national insurance, and maximizing the Annual Investment Allowance which was increased to £500,000 for 2014-2015 and 2015-2016.
2. Additional tips include paying a small salary up to the personal allowance and the rest as dividends from a limited company, claiming expenses for a business mobile phone, and claiming home office expenses at a flat rate of £4/week or using the appointment method for higher claims.
3. Married couples or civil partners should
2. What are the best Directors Salary and
Dividend Levels for 2016/17
Q. “I am a contractor freelancer operating through a limited
company and I use the low salary and dividend combination
of extracting money from my company. In previous tax years I
have made sure that I stayed below the higher tax threshold so
that I didn’t have any income tax to pay on my dividends, however
with the changes to how dividends are taxed from April 2016 with
the introduction of the Dividend Allowance, I am unsure if this is
still the best strategy. Can you advise what the best mix of salary
and dividends is for the 2016/17 tax year
i.e. from April 2016?”
A. “The 2016/17 tax year has
brought with it some major changes to
how dividends are taxed which in turn has an
effect on the optimum tax planning positions for directors
who are also shareholders. The dividend changes from April 2016
have been covered by us in a previous article but we will outline the
position again in this article.
Before getting into the detail we should say that this article is based on
what is currently known at the date of publication which is 10th February
2016. There is a budget announcement due on 16th March 2016 and whilst
there are no anticipated changes due which would affect the advice in this
article, if anything does change we will update this article accordingly.
How dividend taxation worked before
the 16/17 tax year
There used to be something called the
dividend tax credit which meant that from
a personal tax perspective a dividend had
to be looked at ‘gross’, whereas from the
company that was paying the dividends
perspective the dividend was seen as
‘net’. The dividend tax credit was 10%
and an example of how this worked was:
n Company pays a cash dividend of £1,000
n This is grossed up by 10% by calculating
£1,000 divided by 0.9 = £1,111.11
n It is the grossed up figure that is used for
personal tax calculations.
As long as your personal total income including
gross dividend income was below the higher
tax band (£42,385 for 15-16) then there was
no personal tax to pay on your dividends.
If you went over the higher tax band then the
element of dividend in the higher tax band
was taxed at 22.5% of the gross dividend
(which was effectively 25% of the cash
dividend). There were also additional tax
rates at the upper rate of tax as well as
other things that could affect personal
tax including child benefit.
How dividend taxation works from
the 16/17 tax year (from 6th April 2016)
The dividend tax credit has been scrapped,
this makes it easier to understand in our opinion.
A new dividend allowance has been
introduced which means that an individuals
first £5,000 of dividends are tax free.
Over and above this £5,000 the dividend
income is taxed as follows:
n If you have any un-used personal
allowance (£11,000 for 16-17) then
that element is tax free.
n Any dividends in the basic tax band (up
to £43,000 for 16-17) attract a tax charge
of 7.5%.
n Dividends above the basic tax band are
charged at 32.5%.
n Additional rates of tax will apply at the
upper tax band (£150,000 for 16-17).
3. Optimal levels of salary and dividends
for 16-17
Now we have explained how dividends will
be taxed from 16-17, we need to look at
what the most tax efficient levels of salary
and dividends are.
Taking a low basic salary with the balance
of income being extracted as dividends is a
common strategy amongst limited company
contractors, freelancers and small business
owners. The theory is as follows:
n Take a low salary no higher than the
personal allowance so that it does not
attract personal tax
n Make sure the salary is high enough for
national insurance purposes i.e. that it
counts as a years ‘stamp’ for your
national insurance history to help protect
your future entitlement to state pension
and benefits
n The salary is a tax deductible expense for
your business so corporation tax is saved
at 20% on the gross salary.
n Additional money is extracted as
dividends which does not attract national
insurance, therefore you are not paying
any more national insurance than you
need to be.
n Bear in mind that dividends are not a
pre-tax expense for companies so you do
not save corporation tax on dividends.
The question is then, what is
the optimal level of salary?
The introduction of the Employment
Allowance in April 2014 (it is being
increased to £3k from £2k in 16/17) means
that it is slightly more tax efficient to take
a gross salary to the tax free allowance
level (£11k for 16-17), however HMRC have
announced that from 16/17 the Employment
Allowance will not be available to companies
where the only person on the payroll is a
Director, i.e. ‘single director employee’ limited
companies.
Unfortunately, what they have left open as
a ‘grey’ area is the situation where there is
a husband and wife who are both directors
taking a salary with no other employees.
As things stand it would appear this would
be ok, however it is clear that HMRC’s
intention is to block companies that have
no ‘real’ employees from claiming the
employment allowance.
Our stand on this currently is to lean on the
cautious side and only take the employment
allowance if you are employing people other
than connected Directors.
So for a husband and wife only company we
would suggest to not claim the employment
allowance. Equally for contractors we would
therefore suggest not taking the employment
allowance.
We are hoping for clearer guidance to come
from HMRC at which point we may change
our position, however for now we are playing
it safe and it also keeps things a bit simpler.
With this in mind, we have outlined two
different salary and dividend options which
are put together on the basis that you wish
to stay below the higher tax band (£43k).
We have made some key assumptions when
preparing these calculations:
n No student loan balance
n Your only income is your salary and
dividends from your company
n You are not caught by IR35
n You have a standard personal allowance
n Your company has sufficient post tax
profits to support these dividends
Option 1 – claim the employment allowance
(if allowed), more tax efficient with a little more admin
Take an annual gross salary of £11,000 which
is the standard tax free personal allowance
for 16-17. Your personal allowance may be a
bit different if HMRC have adjusted your tax
code but to keep it simple we’ll assume the
standard £11,000.
This level of salary will not attract any personal
income tax, but it will attract some Employees
National Insurance which will total £355.20.
No Employers National Insurance will need
to be paid as it will be covered by the
Employment Allowance.
If you have other employees you will need to
consider if their salaries already use up the
£3k employment allowance, if they do then
you would be better going for Option 2 (see
next page). With regards to dividends, the
higher tax band is £43,000 so assuming you
want to stay in the basic tax band this leaves
you £32,000 of dividends to take. There will be
some personal tax to pay on these though, as
the first £5k is tax free but after that is charged
at 7.5% tax.
See below table for illustration:
16-17 Tax year
£ Annual
Gross Salary 11,000
Dividends 32,000
Total Gross Income 43,000
Employee NIC (355)
Tax on dividends (2,025)
Net cash in pocket 40,620
Any dividends taken above the higher tax
band will be taxed at 32.5% and even higher
if you trigger other tax tipping points such as
the child benefit charge at £50k, £100k tax
free allowance withdrawal and the upper tax
band at £150k.
4. Option 2 –
take a salary up to the NI Primary threshold
If you can’t claim the employment allowance
or want to keep things a little simpler this is a
good strategy for you.
There are two National Insurance thresholds
you need to be aware of:
n Lower Earnings Limit – as long as you
earn above this you are protecting your
entitlement to future state pension and
benefits, without necessarily paying any
National Insurance, leading us on to…
n Primary Threshold – if you earn above
this you have to start paying
National Insurance.
So the sweet-spot is to go up to the Primary
Threshold but no higher.
The National Insurance Primary Threshold for
16/17 remains the same as 15/16 at £155 per
week or £8,060 for the year.
Therefore we would suggest a monthly Gross
Salary of £670 which stays just below this
threshold.
With regards to dividends, assuming as with
Option 1 you wish to take dividends up to
the higher tax band but no further, then you
can take slightly more dividends with Option
2 than with Option 1. This is because you
are only taking just over £8k of salary which
leaves almost £3k of dividends that are in the
tax free allowance, as well as the £5k tax free
for the dividend allowance.
See below for how this works out with regards
to tax – it is the same tax amount but the
dividends are higher.
16-17 Tax year
£ Annual
Gross Salary (£670 x12) 8,040
Dividends 34,960
Total Gross Income 43,000
Employee NIC 0
Tax on dividends (2,025)
Net cash in pocket 40,975
You will note that the net cash in pocket after
income tax and employees NI is actually
slightly higher in Option 2 than 1 by £355,
however this doesn’t factor in the additional
corporation tax you save on the higher Gross
Salary in Option 1 .
See the summary section (opposite) for a
table which compares the two options side
by side and considers the corporation tax
effect as well.
Comparison
See below for a table which compares Options 1 and 2 and shows that overall
Option 1 is more tax efficient by £237.
16-17 Tax year
£ Annual
Option 1 Option 2
Gross Salary 11,000 8,040
Dividends 32,000 34,960
Total Gross Income 43,000 43,000
Employee NIC (355) 0
Tax on dividends (2,025) (2,025)
Net cash in pocket 40,620 40,975
Corporation Taxe saved on Gross Salary 2,200 1,608
Overall savings of Option 1 237
For contractors and freelancers, Option 2 is the recommended route and also has the added
benefit of being able to get a bit more personal cash in pocket despite costing a little more
corporation tax. Option 2 also has the added benefit of being less admin intensive as no
NI needs paying over to HMRC.
Tax planning ideas
Here are some tax planning ideas you might want to consider to help reduce the impact of the
dividend tax changes, these should be discussed with your accountant:
n Transfer a minority shareholding to your spouse so they can receive
up to £5k of dividend tax free.
n Set up a rental agreement with your company for claiming
‘use of home as office’ expenses.
n Company pension contributions
(speak to a pension advisor as various rules to consider).
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