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Free Guides for new and growing businesses from HRBS - fixed fee accountants and business advisors

Save Tax and National Insurance with your limited company

hrbs.biz guide to saving tax and national insurance with a limited company Save Tax and National Insurance with your limited company
It is possible to reduce your (UK) personal tax and national insurance by running your business via a limited company.

The amount of tax and NI you can save will depend upon several factors including the company’s profitability, your personal circumstances and the amount of funds you wish to withdraw from the business.
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Maximise use of your basic rate tax band

hrbs.biz guide to maximising the use of your basic rate band Maximise use of your basic rate tax bandI originally posted this article on the a4uforum in March 2007, and have updated it for the current (2015/16) tax thresholds.

I recommend to all our clients that they maximise the use of their basic rate band. This can be done by declaring interim dividends to take total taxable income up to the maximum at which the basic rate will still apply.

As dividends currently have a 10% tax credit attached, this tax credit can be used to effectively pay the basic rate personal tax liability on the dividend. This is why they are known as “tax free” dividends. Higher rate and additional rate tax payers will have extra tax to pay which is usually collected via self assessment and so they would need to register for self assessment and submit a tax return to HMRC to report the income and tax liability.

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A quick guide for your new limited company

hrbs quick guide to limited company A quick guide for your new limited companyGetting at your profits

Extracting your profits from your company can be by a mix of wage (ie under PAYE) and dividend. In order to pay a dividend the company must have sufficient after tax profits. ie for a £10,000 dividend to be paid the company must have at least £12,500 pre-tax profits (corp tax rate of 20%).

Do not be tempted to withdraw more than is legally available as dividend, as it would be void and treated as a loan repayable to the company. If the loan is to the director it would be a taxable benefit in kind if over £5,000 .

For more on how to extract your profits in a tax efficient way, read our article “Save tax and National Insurance with your limited company”.

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ID Theft

id theft ID Theft
I’m sure you, like me, will be concerned by the media reports on Identity Theft.

As well as personal ID theft, Corporate Identity Fraud is on the increase and the effects can be devastating for the company whose identity has been stolen and its suppliers who supplied the goods in good faith.

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