AND WHO DO YOU ASK FOR HELP?
I am often surprised to hear from people that they have made important business decisions in the past without asking their accountant or tax advisor what the implications might be for their business.
Ten years ago or more, the answers were quite well known, dividends tax and corporation tax were lower than PAYE and National Insurance. Capital Gains tax was something you worried about at tax return time and Benefit in Kind was generally a standard amount.
These days it isn’t so straight forward, this year with corporation tax going up to 25% for profits over £50k and dividend tax at the highest rate it has ever been, the balance between Directors taking a lower salary and dividend, against a sole trader tax is a finer line than ever and I often find myself advising my clients not to jump into a Limited company just yet.
A third option, when more than one participant is involved, is the more popular ‘Limited Liability Partnership’, this is because two partners can equally split the profits for tax, no corporation tax is incurred and for property businesses, the mortgage interest on properties held for letting is allowable for tax.
The changes in our tax regime are happening at least twice a year, and it is our job to keep on top of these for our clients, so the next time you are thinking of changing anything about your business, don’t forget to give your advisor a call.
A small question now can save you money in the future.
If you would like to call us our first consultation is always free.
Ella M Doherty FCCA