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Contractors/Freelancers Archives - Nimbus Accounting

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March 24, 2016

Budget 2016: Small business takeaway

March 24, 2016 | By |

With the dust now settling on the Chancellor’s recent budget, we’ve picked out some highlights that will help small business owners as they attempt to navigate through the plethora of proposed legislation.

The headline grabbers were undoubtedly the falling business rates, corporation tax and capital gains tax measures. The reforms to business rates will have the biggest impact as small businesses will look to save significant funds through the proposals, with an additional 600,000 businesses no longer paying any business rates – ever. The Chancellor’s claim is that this will reduce the business rates burden by nearly £7bn over the next five years.

Some would say that the closing of corporation tax loopholes has been a long time coming, but for small business owners they will now have the assurance that the big boys will now be paying their fair share. A number of polls held with small businesses before the budget indicated that the closing of tax loopholes so that big business paid their fair share was the number one desired outcome from the budget.

There was also the extended commitment to funding for small businesses through the British Business Bank. A significant figure of £1bn of financial support was agreed. This will mean that regional councils will be working with the BBB, to help investing in local businesses.

Nimbus believes that small businesses should be at the heart of the nation’s economic growth plan and it looks like the chancellor feels the same way – finally. The closing of tax loopholes and cutting of taxes will motivate local business owners and make them feel valued in the government’s economic ecosystem.

For more support following Budget 2016, get in touch with our team of accountants.

 

Accountant HoveContractors/FreelancersSmall Business
Nimbus

By Nimbus

March 23, 2015

Salary Increase & £2,000 from HMRC

March 23, 2015 | By |

Another tax year is drawing to a close and it is time to make some adjustments to your salary and dividends.

HMRC are continuing their £2,000 give away for 2015/16. This amount is a credit and can only be offset against employers national insurance contributions. So for the second year running it is more tax efficient to pay yourself a salary up to the personal allowance, which has been raised to £10,600. This pay will attract £304 of employees national insurance contributions over the year. The net tax saving is £203, which is the difference between the employees national insurance contribution payable and the corporation tax saved by having the extra salary. Therefore, as a company director it is more tax efficient to pay yourself a monthly salary of £883.33 and declare a dividend on top.

In order to declare a dividend which keeps you within the basic rate threshold, the net dividends for the year will need to be £28,606 (£2,383 per month). If you decide to pay yourself more dividends, you will be taxed personally at 25% on the net dividend payment.

If you have other employees that will naturally utilise the £2,000 employers national insurance credit, it is advisable to keep the salary to the national insurance primary threshold of £8,060 for the year (£671.67 per month) and the net dividends to £30,892 (£2,574 per month).

Hopefully you will have a good year and your total gross income will get close to £100,000. Be careful at this point as the tax rate is an effective 60% over this amount as a result of the personal allowance being withdrawn at £1 for every £2 of earnings over £100,000. It is advisable to keep your income below this threshold unless completely necessary.

If you want more information on extracting money from your company in a tax efficient manner we are your local Brighton & Hove based accountants, feel free to get in touch http://www.nimbusaccounting.com/contact-us/.

Contractors/FreelancersSmall BusinessTax
Nimbus

By Nimbus

November 9, 2011

Are you that lazy that you need an Umbrella?

November 9, 2011 | By |

Your accountant in Brighton and Hove has decided to go head first into the blogging world with our first blog on umbrella companies.

An umbrella company, normally run by a firm of accountants, holds your contract and pays your through a payroll scheme, they also kindly repay some of your expenses you have incurred (how thoughtful). This is the same tax treatment as an employee, but the umbrella company/accountant charges you. Being in an umbrella company, apparently, helps with the IR35 substitution clause, but what about a reality check?

So, here you are in your umbrella company, paying tax as if you were an employee but not getting any of the perks. No holiday pay, no sick pay, no employer pension contribution and more importantly no annual staff Christmas party. However, with the new Agency Workers Regulations implemented on 1 October 2011, will you now be entitled to these benefit’s? It’s a grey area and it will be interesting to see how the legislation is interpreted. If you are going to get these benefits then why not become an employee with the job security and save on the accountant’s costs?

Our accountants at Nimbus have never understood why contractors or freelancers use an umbrella company. We can only assume that they think running their own limited company is too much hard work? Well we are here to tell you otherwise.

Most qualified accountants should take care of everything for you, that’s right, there is no extra work for you. An accountant, qualified of course, can take care of everything from the formation of your own company and all the statutory requirements.

Now for the sales pitch, please skip if you are happy with your current accountant!

Nimbus Accounting are qualified accountants that specialise in contractor/freelance clients and enjoy making their life easier, whilst increasing their monthly take home pay. We can take care of everything from forming a company, registering with HMRC for Corporation Tax, VAT, PAYE, dealing with Companies House, helping you open a bank account, setting you up with free accounting software, preparing your payroll, sending you dividend certificates and most importantly keeping your tax bill down. And the best part, all of this for only £99 + VAT per month.

If you would like one of our accountants to calculate how much better off you would be operating your own limited company, please email us for a free wealth check.  

Accountant HoveBrighton & WorthingContractors/Freelancers

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