Who is your accountant working for?

Is your accountant working for you - or the Taxman?

I was referred to a business owner who wasn't happy with his present accountant. After a brief chat I discovered he was being advised to draw ALL of his remuneration by way of salary from the company. By doing this with his level of profits it is the LEAST tax efficient way of taking money from a company and is costing him at least £3,000 a year in tax an national insurance.

WHY IS THE ACCOUNTANT NOT TRYING TO SAVE THIS PERSON MONEY?

Because it is EASIER to do it this way and there is no risk. But it is WRONG for the client.

As an accountant and tax advisor it is my duty to make sure my clients pay as little tax as is LEGALLY possible. And by taking money from a company by a mixture of salary AND dividend this can be achieved fairly simply.

All the best

Shaun - pulling my hair out with this kind of news!

http://www.tax-sorted.biz
http://www.welovebookkeeping.co.uk

Be alert - yet another scam!

Be warned, the following phish is doing the rounds at the moment.

The email, allegedly from HMRC, invites the recipient to click on the link and submit personal data.It is of course scam, HMRC do not send emails out asking people to submit data.You have been warned.

"After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund of 188.50 GBP. Please submit the tax refund request and allow us 6-9 days in order to process it.A refund can be delayed for a variety of reasons. For example submitting invalid records or applying after the deadline.To access the form for your tax refund, please click here.Regards, HM Revenue & Customs© Copyright 2008, HM Revenue & Customs UK."

Not a tax tip but a good one anyway - Take a Break!

Well you won't hear from me for another 10 days or so because I am doing what most self employed people don't do enough of - taking a break and going on holiday!

Yes I know you think you are indespensible and the whole business will crumble without you but hey - why not give it a try? I'm sure your team will surprise you and function perfectly well without you.

Of course, this will be easier if your business is systemised and doesn't solely rely on you. Try it sometime. And if you havent read the book "The e-myth Revisited" by Michael Gerber then you should read it and start to systemise your business. Click here to buy a copy from Amazon.

a bientot!

Shaun

http://www.tax-sorted.biz/

http://www.welovebookkeeping.co.uk/

Is the first £30,000 of your redundancy package really tax free?

With the current credit crunch, some employers are considering reducing their work forces.

If you are an employer in this unhappy position then professional employment advice should be taken at the outset. If some employees are to be made redundant then both legal and tax issues should not be overlooked.

There is a common misconception that the first £30,000 of any payout to employees leaving the business can be made free of tax. Unfortunately it is not that simple, as a number of issues need to be considered, including;

Is the employee retiring and the payout a retirement package?
Is there an express or implied contractual obligation to pay the money?
Is the money being paid in return for something, such as a restrictive covenant?
Is the payment a terminal bonus?

If the payout does not fall under one or more of these, then it may well fall under the tax rules for genuine redundancy payments, with the result that the £30,000 tax free exemption will apply.

A wholly voluntary payment at the ending of an employment will be classed as genuine compensation for redundancy and qualify for the £30,000 tax exemption.

Tip: Before dismissing any employees or announcing redundancies take advice to cover the employment and tax issues. Attention to detail at the outset can help avoid the tax pit falls and possibly identify significant tax savings.