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Wealth matters tax saving strategies
The document discusses key tax points from the recent UK budget, including an increase in employers' national insurance contributions to 13.8% and a reduction in the annual investment allowance from £100k to £25k. It also discusses the advantages of using flat rate VAT for contractors with turnovers under £150k, and how contractors can save thousands in taxes by structuring their pay efficiently, such as paying up to the national insurance threshold of £5,715 and taking the rest as dividends. The document encourages visiting the Crunch.co.uk website for more information and tax calculation tools.
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Wealth matters tax saving strategies
- 1. Crunching your tax!DarrenFell – co-Founder, MD Crunch.co.uk7/20/101Visit www.crunch.co.uk, the next generation of accountants
- 2. Key thoughts onthe budgetLabour Budget is still law
- 3. NI is stillrising 8 to 9% (think of both budgets together)
- 4. NI increase 2011-still more tax efficient - Limited route
- 5. Employers NI tobe increased 1% to 13.8%. Even more important to be tax efficient on payroll7/20/10Visit www.crunch.co.uk, the next generation of accountants2
- 6. Other key taxpoints…VAT changes 4th January – add to your software
- 7. IR-35 – Apossibility it could be worse - add NI to Ltd dividends for small businesses?
- 8. Annual investment allowance- buying equipment - reducing first year allowance from £100k to £25k!7/20/10Visit www.crunch.co.uk, the next generation of accountants3
- 9. Back to basicsAdvantagesof Flat rate VAT
- 10. Many contractors stilluse Standard VAT
Editor's Notes
- #2 Presented by Darren Fell.Tax saving on the compliance side needn’t be complicated and many simple tax saving tips can be easily actioned. I’m here to show you these.
- #3 Labour budget (24th March 2010 – Alistair Darling) and Coalition Budget (22nd June – George Osbourne) must be thought of as running together as Labour’s original budget is still law.Personal allowance was increased by £1k from £6,475 to £7,475.NI increase 2011 is still in place 8 to 9% (for self employment class 4) THEREFORE still more tax efficient to go down the Ltd route, even more so if you are using an Umbrella.Being tax efficient on payroll will be increasingly important from April 2011. Discuss in later section on paying yourself.employers' National Insurance contributions threshold - the threshold at which employers start to pay National Insurance will be raised by £21 per week above indexation in April 2011employers' National Insurance contributions exemptionoutside the Greater South East region, new businesses will be exempted from up to £5,000 of employer contributions for each of their first 10 employees hired
- #4 VAT changes will be automatic within Crunch.SAGE,Quickbooks and spreadsheets will need to be changed.Annual Investment Allowance:If you are thinking of having a large capital expenditure. Best to do it now. Applies to Crunch with our new office.
- #5 So many contractors still use Standard VAT registration:Stay Standard VAT only if you are buying lots of materials or equipment on a regular basis otherwise Flat rate is the option, even to register voluntarily.Capital Expenditures can be claimed on purchases, made in one go, that collectively reach £2,000.
- #7 VAT Threshold is £70k. Well worth considering voluntary registration.Do note you cannot flip and change from Flat rate.
- #10 More help and where slides can be found.
- #11 Any questions at all. Contact 0844-500 8000 to speak to the Crunch Advisors.