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If you are putting money into a pension
scheme or ISA, you may want to make the most of the annual limits
for the year ending 5 April. |
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More year-end
tax tips |
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Salaries
Everyone can earn £5,435 in the current tax year without
having to pay any tax or national insurance. If you have been
dragooning your lovely family to help out in your business, you
should pay them a fair rate for their contribution. Ideally, this
will be close to their personal allowance. This advice may not
apply if they have other sources of income so check with your
accountant if you are in any doubt.
Salaries are a deductible expense for calculating business profits.
For advice relating to your specific situation, please call 0845
652 5220 or use our contact form.
Dividends
Dividends are paid to shareholders from after-tax profits. The
net dividend is effectively tax-free for standard rate taxpayers.
If your company is profitable, you should consider declaring a
dividend before 5 April to use up as much as possible of the shareholders’
standard rate tax bands – but remember to add on the tax
credit when you are working out the amount.
On the other hand, if you have already earned enough to put you
in the higher tax bracket, see if you can hold out until 6 April
so that the dividend falls into the next tax year. Even if you
end up paying higher rate tax next year, you will at least delay
the pain by 12 months. There’s always that caveat in these
volatile times - even though tax rates have already been published
for 2009/10, the chancellor could conceivably decide that he needs
to raise tax rates. Just before an election? Seems unlikely but
lots of things do.
Ask your accountant for advice or to contact us call 0845 652
5220 or use our contact form.
This advice is of a general nature and may not be applicable
to your situation. Please contact us on 0845 652 5220 about your
specific circumstances.
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Savings
& investments
Capital
gains and losses
Inheritance
tax
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