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How business owners can save on tax
Monday 21 December 2009

Dains are advising high earners facing the prospect of a 50% income tax rate, increased National Insurance Contributions and reduced tax relief on pensions to plan for ways to reduce the impact of those changes now.

Andy McQuillan, Tax Partner from Dains said “For business owners, this is a particularly crucial issue as there are different ways of extracting value from a business, which attract different levels of tax. Within a company, directors have the options of taking dividends, receiving cash bonuses or paying additional pension contributions, while unincorporated business owners need to take decisions on whether to withdraw capital from the company, or leave it in.

“The forthcoming changes to personal taxation mean capital and corporate taxes are now significantly lower than income tax, and taxpayers need to consider whether alternative methods of receiving income may now be more effective, including bringing forward income, deferring expenditure and restructuring investments to realise capital rather than income”

With personal tax rates returning to levels not seen since the 1980s, high earners need to begin planning now for how they can minimise the effect of the proposed changes.

For more information or advice please contact Andy McQuillan on tel: 0845 555 8844 or email tax@dains.com

Primary offices at... Birmingham, Buton, Derby, Lichfield and Rugeley.

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