Wealth Matters Tax Saving Strategies
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Presentation given at Contractor Seminar in London July 20th 2010 by Darren Fell (Crunch MD)
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Wealth Matters Tax Saving Strategies
- 1. Crunching your tax! Darren Fell – co-Founder, MD Crunch.co.uk 7/20/10 1 Visit www.crunch.co.uk, the next generation of accountants
- 3. NI is still rising 8 to 9% (think of both budgets together)
- 4. NI increase 2011- still more tax efficient - Limited route
- 5. Employers NI to be increased 1% to 13.8%. Even more important to be tax efficient on payroll7/20/10 Visit www.crunch.co.uk, the next generation of accountants 2
- 7. IR-35 – A possibility it could be worse - add NI to Ltd dividends for small businesses?
- 8. Annual investment allowance - buying equipment - reducing first year allowance from £100k to £25k!7/20/10 Visit www.crunch.co.uk, the next generation of accountants 3
- 10. Many contractors still use Standard VAT
- 11. Fall under £150k turnover? You can benefit…
- 12. Make margin on every invoice, from HMRC!
- 13. Still claim on capital expenditures over £2k (inc VAT)
- 14. The mechanics behind flat rate….7/20/10 Visit www.crunch.co.uk, the next generation of accountants 4
- 15. Under the hood - the Flat Rate sectors… 7/20/10 Visit www.crunch.co.uk, the next generation of accountants 5
- 17. First year saving: £5,032
- 18. Example at £68k turnover:
- 19. First year saving: £1,513
- 20. Metric’s across Crunch’s hundreds of contractors:
- 21. 66% are VAT registered
- 22. 70% are Flat Rate VAT7/20/10 Visit www.crunch.co.uk, the next generation of accountants 6
- 24. Been poorly advised to pay higher salaries;
- 25. avoid glare of HMRC and a potential IR35 investigation
- 26. Pay up to NI threshold, £5,715
- 27. Many contractors sit on £22k salaries, extra tax?…next7/20/10 Visit www.crunch.co.uk, the next generation of accountants 7
- 28. The mechanics…a £3,457 tax saving! 7/20/10 Visit www.crunch.co.uk, the next generation of accountants 8
- 30. Need a personal calculation? see feedback forms
- 31. Wide ranging advice: www.freelanceadvisor.co.uk7/20/10 Visit www.crunch.co.uk, the next generation of accountants 9
- 32. 7/20/10 Visit www.crunch.co.uk, the next generation of accountants 10 Any Questions?
Editor's Notes
- Presented by Darren Fell.Tax saving on the compliance side needn’t be complicated and many simple tax saving tips can be easily actioned. I’m here to show you these.
- Labour budget (24th March 2010 – Alistair Darling) and Coalition Budget (22nd June – George Osbourne) must be thought of as running together as Labour’s original budget is still law.Personal allowance was increased by £1k from £6,475 to £7,475.NI increase 2011 is still in place 8 to 9% (for self employment class 4) THEREFORE still more tax efficient to go down the Ltd route, even more so if you are using an Umbrella.Being tax efficient on payroll will be increasingly important from April 2011. Discuss in later section on paying yourself.employers' National Insurance contributions threshold - the threshold at which employers start to pay National Insurance will be raised by £21 per week above indexation in April 2011employers' National Insurance contributions exemptionoutside the Greater South East region, new businesses will be exempted from up to £5,000 of employer contributions for each of their first 10 employees hired
- VAT changes will be automatic within Crunch.SAGE,Quickbooks and spreadsheets will need to be changed.Annual Investment Allowance:If you are thinking of having a large capital expenditure. Best to do it now. Applies to Crunch with our new office.
- So many contractors still use Standard VAT registration:Stay Standard VAT only if you are buying lots of materials or equipment on a regular basis otherwise Flat rate is the option, even to register voluntarily.Capital Expenditures can be claimed on purchases, made in one go, that collectively reach £2,000.
- VAT Threshold is £70k. Well worth considering voluntary registration.Do note you cannot flip and change from Flat rate.
- More help and where slides can be found.
- Any questions at all. Contact 0844-500 8000 to speak to the Crunch Advisors.