Personal allowances for the 2014/15 tax year are £10,000.
The higher rate level of income tax starts with a gross income in excess of £41,865.
By drawing a low level salary £660 per month (£7,920 per annum) and supplementing this with dividends £33,945 gross you can draw £3,174 net per month without paying any personal tax or national insurance. (subject to the business being profitable and able to pay a dividend and assuming no other personal income, benefits etc).
Did you know?
You can rent a room in your home for up to £4,250 per year with no income tax implications.
Did you know?
Business corporation tax is 20% on profits up to £300k for the 2014/15 tax year and a unified rate of 20% across the board from 1 April 2015.
In 2014/15 where there are associated companies the limits are reduced by dividing them by one plus the number of associated businesses carrying on a business.
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The background supporting records of all companies and organisations must be kept for at least six years from the end of the last relevant accounting period.
Research and Development tax credits were introduced to encourage innovation and enterprise within the UK economy, SMEs can claim R&D tax credits of 225% for expenditure incurred after 1 April 2012.
Did you know?
Capital Gains Tax (CGT) is charged at a simple flat rate of 28%, if taxpayers only pay basic rate tax and make a small gain they may only be subject to a CGT rate of 18%, but once the total of taxable income and gains exceeds the higher rate threshold, the excess will be subject to 28% CGT.
Entrepreneurs relief applies to the sale of a business, shares in a trading company or an individuals interest in a trading partnership and when given the CGT rate reduces to 10% rather than 28%. There is a lifetime limit for gains up to £10 million.
Did you know?
The VAT registration limit is £81,000, but you can voluntarily register below this level.
If your turnover is going to reach the turnover registration limit you must register within 30 days.
By David White a Partner in Charterhouse, based in Beaconsfield
