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 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 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 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 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 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 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

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

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

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 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 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 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

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 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 – 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? 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

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

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 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 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 – 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

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

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 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

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

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 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 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

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 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 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 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

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

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

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

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

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 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

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