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Getting profit out of your business (without losing a whole packet of tax) can be a challenge but with a little knowledge and a little planning, any business owner can maximise the amount of their profit that they can get out of their business both legally and efficiently.
Like it's big brother EIS, the SEIS is a very powerful tool in managing your tax bill. While SEIS is slightly more limited in scope, the benefits exceed the EIS structure by quite a bit.
SEIS is generally for smaller and younger companies who are less than 2 years old.
Have a look through the guide and hopefully it gets your imagination stoked up while giving you a bit of a background to the scheme itself.
Unfortunately income tax is something that both employees and the self-employed are subjected to, whether they like it or not. Each pound earned as some element of tax applied to it.
While this is just a fact of life, there are legal ways to reduce the amount you pay in income tax over time - by using the HMRC approved schems like the Enterprise Investment Scheme (EIS).
Today we're going to give a whistle-stop tour of this particular scheme and hopefully show you how it can help you to legally reduce the amount of tax you pay.
Using the combination of both salary and dividends is something that many business owners are familiar with. This is the general advice that most owners receive from their advisers as it has traditionally been the most efficient OBVIOUS method.
With all the changes to the tax rules in the last few years, this strategy, while still a solid one, needs to be reassessed on an annual basis to ensure that it remains tax efficient. Using the tax free allowances that we are provided with by HMRC yearly, a salary & dividends strategy is robust.
This strategy should also be fairly familiar to most. Using a salary and paying ourselves a bonus at some point during the year is common.
The biggest benefit of using a lower salary and a bonus is that it gives flexibility to the business, as a bonus can be paid at any time during the year.
As with the Salary only strategy, we all generally benefit from our personal allowance of £11,500 before any Income Tax is applied.
How to get £££ out your business - Part One
SALARY - This strategy should be fairly familiar to everyone, as generally all people who are working receive a salary. This is far and away the most obvious, and common, way to get paid from your business.
What milestones really matter to business owners in Britain right now? We wanted to find out so we decided to run an online survey to find out. We got 1000 business owners to tell us what are the more important milestone(s) to them and we've collated the results here.
Seemingly each year the Chancellor changes the rules on pensions, sometimes for the good but generally for the bad. This year is one of the "bad" years.
This bodes poorly for anyone currently using pensions as their main tax planning strategy but fear not - there are altenatives!
We've all heard of them, the "new" way to reduce how much tax each of us pay each month or each year. There always seems to be some "exciting" scheme that comes out that promises exactly this.
Working in my sector, I hear way too many stories about how people have been sold a plan which frankly relied on such a convoluted process that Einstein himself would have struggled to unwind and understand it.
Acronyms like EFURBS and EBTs are often thrown around by advisers as "legal" ways to reduce some element of taxation.
Firstly, I hate to be the bearer of bad news, but frankly most of these are absolute rubbish, or even worse - flat out scams.