Introduction:
With the country deep in debt, it was no surprise that tax rates would have to rise. Having said that, there is still much debate about the overall impact of increasing headline rates to 50%. Some say that this will decrease the overall tax take - as people sort out their affairs so that they avoid paying this tax. For some Directors with incomes just in excess of £100,000 the erosion of their Personal Allowances will result in an effective rate of tax of 60% or more.

By now you will have been flooded with facts and figures relating to the Budget. Rather than add to this, we would prefer to provide you with practical advice on how to minimise your tax exposure. In order to do this we are happy to discuss your situation and offer some appropriate options.

 

It is possible to reduce exposure to tax without involving any "tax avoidance schemes".

Paying as little as 15.60% rather than 40% or 50% is possible using approved HMRC Legislation.

We have access to 2 Corporate Investments that reduce the effectiverate of tax paid - or in "investment" terms provide 1st Yr returns of around 30% by utilising HMRC Accepted/Approved Legislation.

QUICK SUMMARY:

COMPANY PROFITS IN EXCESS OF £50,000	COMPANY PROFITS IN EXCESS OF £600,000
Corporate Venturing Scheme (CVS) Investment.	Media Backed LLP Investment with NO loans.
3 Yr Term	5 Yr Term
Invest £15 and Receive a Yr 1 Tax Certificate worth £20 - with an additional £3.7 (approx) Tax Relief during Years 2-3.	Invest £20.5 to receive allowable losses (s.393A ICTA 1988) of £95, resulting in a tax reduction of £27 (£95 x 28%). Can also help avoid "Quarterly" payments of Corporation Tax.
Reduces 21% Rate of Corporation Tax down to an initial 15% - with possible additional returns from the investment in order to reduce this further.	Reduces 28% Rate of Corporation Tax down to 21% - with possible investment returns in Yr 2-5 to reduce this still further. (Average past portfolio equates to approx 14%)
The company can then work out a balanced approach and pay a Dividend to the Director - and use some of the money saved to help with planning which pays the Income Tax on the Dividend next year. (For a complete set of figures on how this dividend support planning works - pease contact us now).

The following PDF walks you through HOW each of these Corporate Investments is able to provide tax benefits. This is an overview for Accountants and Advisors and is not to be taken as investment advice, or a full Information Memorandum (which is available on request).

Should the PDF not be visible, it can be downloaded directly from: www.Corporateconsulting.co.uk/Corporate_Investments_2009.pdf

 

With Corporation Tax rates as low as 21% it makes sense to generate profits within a Corporate body. We can then reduce the effective rate to as low as 15.6% and move the net amount into an arrangement that has the blessing of HMRC. The funds within this structure can be used as a "money box" for investments (0% CGT) - and can even provide access to loans at low interest rates. There will be no income tax or National Insurance payments.

With careful planning the Director can totally avoid the 50% tax band.

 

It is important to have a complete Tax Review - to explore all your options following the Budget.

We will be more than happy to discuss your needs in total confidence. Contact us NOW!


Please note: We are not investment or pensions advisors, so anything you read on this web site should not be taken as formal investment or pensions advice.

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