Self-Employed Pension Tax Relief 2023/24 November 9, 2023 Self-employed pension tax relief 2023/24 Unlike employees who usually benefit from workplace pension schemes, self-employed individuals have to take responsibility for their own retirement savings. The world of pensions can be a daunting and complicated area and if you’re not sure of anything you should speak with a qualified pensions advisor before making any decisions.… Read More
High Income Child Benefit Charge – 2023 update September 11, 2023 High Income Child Benefit Charge 2023 update What is the High Income Child Benefit Charge? Child Benefit is a financial benefit provided by the UK government to parents or guardians responsible for raising children. It is paid to eligible families to help with the cost of raising children. The High Income Child Benefit Charge is… Read More
Company Pension Contributions for Directors – 23/24 May 30, 2023 Company Pension Contributions for Directors 2023/24 update If you work through your own limited company, it can be very tax efficient to have your company make pension contributions directly into your pension scheme. In this article we will explain why this can be tax efficient and how it compares to making personal pension contributions. Please… Read More
Corporation Tax Changes 2023 March 15, 2023 Corporation Tax Changes 2023 The rate at which corporation tax is charged on company profits is changing from 1 April 2023 and will no longer be at the fixed rate of 19%. From 1 April 2023 the main rate will be 25% for companies with taxable profits over £250,000. Profits below this level will be… Read More
Optimum Director Salary and Dividends 2023/24 – Limited Company Directors February 21, 2023 Optimum Director Salary and Dividends 2023/24 – Limited Company Directors When you are trading through your own limited company one of the key tax planning items for you to consider is how much salary and dividends to pay. The advice in this article is aimed towards limited company contractors, freelancers and micro businesses with one… Read More
Limited Company Contractor Tax Case Study 2022-23 May 23, 2022 Limited Company Contractor Tax Case Study 2022-23 In this article we work through a hypothetical case study of a contractor / freelancer working through their own limited company to explain how the tax works and some options for tax planning. The tax rates are based on the 2022-23 tax year. Gerry provides IT consulting services… Read More
Optimum Director Salary and Dividends 2022/23 – Limited Company Directors February 10, 2022 Optimum Director Salary and Dividends 2022/23 – Limited Company Directors When you are trading through your own limited company one of the key tax planning items for you to consider is how much salary and dividends to pay. The advice in this article is aimed towards limited company contractors, freelancers and micro businesses with one… Read More
Limited company loans to directors December 21, 2021 Borrowing from your limited company – director loans You are allowed to borrow money from your own limited company but there are various rules and tax traps to be aware of which we discuss in this article. You can’t take a loan from your company indefinitely without causing tax issues (if you could, many people… Read More
Charitable donations – limited company vs personal November 28, 2021 Limited company charitable donations vs personal charitable donations Making a donation to a charity is a fantastic thing to do, and if you can get some tax relief along the way, even better! In this article we explain how tax relief for charitable donations work when they are paid by a limited company and compare… Read More
Electric car lease through limited company September 29, 2021 Leasing an electric car through a limited company We are being increasingly asked by business owners whether it’s tax efficient for them to get an electric car through their own limited company, so we have written an article to explain the key factors to consider when making this decision. Historically, company cars have been quite… Read More
Company Pension Contributions for Directors August 26, 2021 Company Pension Contributions for Directors If you work through your own limited company, it can be very tax efficient to have your company make pension contributions directly into your pension scheme. In this article we will explain why this can be tax efficient and how it compares to making personal pension contributions. Please note that… Read More
Optimum Director Salary and Dividends 2021/22 – Limited Company Directors February 15, 2021 Optimum Director Salary and Dividends 2021/22 – Limited Company Directors When you are trading through your own limited company one of the key tax planning items for you to consider is how much salary and dividends to pay. The advice in this article is geared towards limited company freelancers, contractors and micro businesses with one… Read More
Limited Company vs Sole Trader – The Power of Retained Profits August 18, 2020 Limited Company vs Sole Trader – The Power of Retained Profits Deciding whether to run your business as a sole trader (self employed) or a limited company can be a difficult decision because there are so many factors to consider – both tax and non-tax. In this article we are going to focus on just… Read More
Use of home as office for a limited company August 4, 2020 Limited company directors and working from home If you are running a limited company from a commercial office space, any costs you incur such as rent, business rates, utilities, insurances and service charges will usually be allowable costs for your company which reduce the business profit and therefore reduce the corporation tax. However, what about… Read More
Optimum Director Salary and Dividends 2020/21 – Limited Company Directors March 12, 2020 Optimum Director Salary and Dividends 2020/21 – Limited Company Directors When you are trading through your own limited company one of the key tax planning items for you to consider is how much salary and dividends to pay. The advice in this article is geared towards limited company freelancers, contractors and micro businesses with one… Read More
IR35 Changes 2021 November 8, 2019 IR35 Changes 2021 – April 2021 private sector IR35 update April 2021 saw some sweeping changes to IR35 for the private sector. The underlying principles of IR35 didn’t really change – what changed is who is responsible for the decision as to whether or not an engagement is inside or outside of IR35. Please note… Read More
How is corporation tax calculated? August 22, 2019 How is corporation tax calculated? Corporation tax for small business explained! When you trade as a limited company, your company will pay corporation tax based on the level of profits it makes. In this guide we explain the basics of corporation tax including how it is calculated and when to pay your corporation tax. We… Read More
Payments on Account Explained May 21, 2019 What are payments on account? We explain when you need to make payments on account to HMRC for your self assessment tax return Payments on account for personal tax returns (self assessment) can be one of the most confusing things to understand when it comes to your income tax bill. The personal tax year in… Read More
What is the tax treatment of leasing a van for your business? April 25, 2019 Leasing a van through your limited company Question: “I run a small limited company and am planning to get a company commercial vehicle (van) through my business, but I am unclear on how the tax works, can you explain what tax relief I will get as well as any other tax issues to consider?… Read More
Limited Company vs Sole Trader 2019/20 April 11, 2019 Limited company and sole trader differences 2019/20 In this article we are going to discuss the main differences for the 2019/20 tax year between running your business as a sole trader in comparison to a limited company, in general terms and then in regard to UK taxation (the article assumes you are a taxpayer in… Read More
Optimum Salary and Dividends 2019/20 – Limited Company Directors January 11, 2019 Optimum Salary and Dividends 2019/20 – Limited Company Directors When you are trading through your own limited company one of the key tax planning items for you to consider is how much salary and dividends to pay. The advice in this article is geared towards limited company freelancers, contractors and micro businesses with one or… Read More
Reclaiming VAT on expenses May 25, 2018 Reclaiming VAT on expenses – What can you reclaim VAT on? This article looks at some of the main rules in relation to reclaiming VAT on your business expenses. Please note that this isn’t a definitive list of rules, and you should always check with your accountant, or HMRC, if you’re in any doubt. This… Read More
Why cash is different to distributable profits March 15, 2018 Distributable profits and cash I’m a contractor and a sole shareholder/director of my own limited company. There is currently £20,000 in my limited company bank account but distributable profits in my accounting software are showing as a completely different figure. Can you please explain to me how this could be the case? Answer,… Read More
What is a profit and loss account January 24, 2018 Profit and loss account explained As a director of a limited company, you are responsible for filing accounts with Companies House and with HMRC each year (along with a corporation tax return). Although most people appoint an accountant to handle this, it’s still important to have a basic understanding of how your accounts are put… Read More
Recharging expenses to client January 10, 2018 Recharging expenses to client I am a self employed photographer and I recharge a lot of expenses back to my clients, for example items purchased for shoots. If I recharge these costs to my client do I still need to claim them on my tax return? Answer January 2018 Recharging of expenses is… Read More
Tax on dividends 2018/19 January 9, 2018 Optimum Directors Salary & Tax on Dividends 2018/19 If you operate through your own UK limited company as a freelancer, contractor or even as a small business owner, you’ll often want to use the tax planning strategy of extracting money from your company through a combination of dividends and a low salary to ensure you… Read More
Self Employed Pension Tax Relief – Simple Guide to Pensions November 16, 2017 Do the self employed get tax relief on pension contributions? I am a self employed designer and I have a question about pension tax relief – I have no other income outside of my business and I earn roughly £30,000 profit per year. I am considering starting personal pension contributions – will these help… Read More
Year End Accounting Adjustments October 20, 2017 Year end accruals and prepayments I run a small PR agency as a limited company and I am just coming up to my first year end which is 30th September 2017. I am a little confused with what income and costs I should be including in my accounts as I have some timing issues around… Read More
Trivial Benefits September 22, 2017 Trivial Benefits for Limited Companies Question – I run a small limited company as a freelance designer where myself and my wife are the only shareholders with no other employees. I read about something called trivial benefits which I believe I can take advantage of, can you explain what these are and how they… Read More
Sole Trader vs Limited Company 17/18 May 25, 2017 Differences of Sole Trader vs Limited Company 17/18 What are the key advantages and disadvantages of trading as a self employed sole trader vs a limited company for the 2017/18 tax year? Making the decision as to which structure your business operates as can be crucial, whether that be in terms of tax savings, perception to… Read More
Optimum Directors Salary and Dividends 2017/18 January 12, 2017 Optimum limited company director salary and dividends 2017/18 When you are trading through your own limited company one of the key tax planning items for you to consider is how much salary and dividends to pay. This article outlines the most tax efficient salary and dividend structure for the 2017/18 tax year (6th April 2017… Read More
Contractor Travel Expenses October 5, 2016 Contractor Travel Expenses Question, Contractor Travel Expenses: I am a limited company contractor and I have been working on an 18 month contract which is based at Cannon Street in the city of London (this was my first contract). My contract is due to finish soon after which I will be taking on a 12 month… Read More
IT contractor closing down limited company September 6, 2016 IT contractor closing down a limited company I am an IT contractor and have been trading through my limited company for eight years. I am the sole director and shareholder. I have been offered a role as a full time employee which I am going to accept. I don’t see the need to keep my company… Read More
What is a Balance Sheet? July 28, 2016 Understanding a Balance Sheet “I run a small creative business and every year my accountant sends me my tax return and accounts which include a profit and loss account and a balance sheet. I understand my profit and loss account but find my balance sheet a mystery. Can you help me understand what a balance… Read More
Tax Relief for Garden Office as Business Expense July 13, 2016 Is it possible to treat a garden office as a business expense to get tax relief? Question, I run a small limited company, mainly working from home, and I am considering building a garden office and am wondering if I can claim some or all of the costs as a business expense to save tax?… Read More
Claiming Mobile Phone Expenses – Limited Company June 29, 2016 What is the best way to claim mobile phone expenses from your limited company? Question, I am an IT contractor trading through a limited company and although I use my mobile phone for both business and personal calls, I don’t currently claim anything from my company because my monthly tariff is so low. I don’t… Read More
Best Directors Salary and Dividend Levels 2016/17 February 10, 2016 What are the best Directors Salary and Dividend Levels for 2016/17 Question: “I am a contractor freelancer operating through a limited company and I use the low salary and dividend combination of extracting money from my company. In previous tax years I have made sure that I stayed below the higher tax threshold so that I didn’t have… Read More
How to pay my partner for helping in my self-employed sole trader business September 29, 2015 Employing your spouse as a sole trader I am a self-employed designer earning about £50k after costs. My spouse does admin work for me in the evenings – she already has employment income of about £30k per year from her full time job – is it worth me paying her for the book-keeping work? How… Read More
Can I claim glasses through my Limited Company? March 16, 2015 Can I claim glasses as a business expense? Question: “I run my own Limited company and spend most of my time using a computer. My eyesight has worsened and I will need to get a sight check and new glasses. Can I put these through my company?” Answer: There are very specific rules surrounding… Read More
Garden Office – Limited Company October 22, 2014 It is quite a popular option amongst our micro company, freelancer and contractor clients to work from a garden office, so we have outlined the tax implications of this below (this is for people trading through a Limited Company). Corporation Tax Your company can pay for the full cost of the garden office… Read More