Tax Efficient Remuneration

24th January 2016
  • Examining whether it is best to run the business as a limited company or otherwise (sole trader, partnership or LLP),
  • If operated as a limited company:
    • Looking at the combined business and personal tax ‘picture’ and optimising the mix of retained profits, salary, bonus and dividends (for the business owner and, where relevant, immediate family members). In order to direct dividends tax efficiently, it may well be appropriate to create a structure with ‘alphabet’ shares,
    • Where the business occupies premises owned personally, comparing the income taxcapital gains tax and inheritance tax issues of whether or not to charge a rent,
    • Maximising receipt of tax free benefits in kind (either as additional remuneration or via a salary sacrice scheme),
    • Examining whether it is acceptable and appropriate to receive taxable benefits in kind,
    • Whether it is better for cars to be owned and expensed by the company, by employees personally, or by a separate unincorporated service business,
    • Whether company car tax could be reduced, without unacceptably prejudicing choice, by changing the vehicle to:
      • A lower CO2 emission car,
      • A classic car (aged over 15 years old and now worth less than £15,000),
      • A van (including some twin cab pick-ups),
      • A pool vehicle
    • Whether it is cheaper for employees to reimburse the company for the full cost of privately used fuel, or suffer the tax charge on the fuel benefit in kind,

    As well as structuring remuneration to be tax efficient, we are mindful that there are often other drivers behind this process:

    • Linking financial reward to actual performance, to motivate key individuals,
    • Making sure that the remuneration split assists with, and does not jeopardise:

Related Services

Payroll Tax Planning


 
Other items in Blogs
 
Peter Brown
13th January 2019 5 things you need to know about Making Tax Digital

  Making Tax Digital (MTD) is the hot topic this year. It’s one of the most fundamental changes to the UK tax system since the introduction of self-assessment. From April 2019, VAT registered businesses with a turnover of over £85,000 will be required to keep records using software approved by HMRC.  We have condensed the…

Read More »

Stephen Malkin
11th January 2019 Financing your self-build project

  Borrowing to build Self-builders require more money up front than conventional homebuyers. This is because they have to buy their building plots and fund their planning applications before they can apply for any loans. Self-build mortgages tend to be interest-only as fixed-rate loans have substantial exit fees for those who change loans when the…

Read More »

Stuart Kierman
9th January 2019 Running A Business From Home

  If you are looking to start up a business, it is likely to be home based, at least in the early days.  Figures suggest that over 60% of businesses start in this way and that there are 2.9m businesses in the UK operating from home. This blog looks at some of the common questions…

Read More »

Richard Alecock
21st December 2018 Making Tax Digital …… Only 100 days to go!

It’s time to decide how you will digitalise your records in order to meet HMRC requirements ahead of April 2019 HMRC wants the UK to be one of the most digitally advanced tax administrations in the world, improving efficiency, effectiveness and ease of compliance. Their plans signal the end of paper accounting for millions across…

Read More »

Ian Piper
19th December 2018 A Taxing Christmas?

Business owners, like the rest of us, will be all too aware that Christmas is a ‘challenging’ time. A short working month usually means less production, less sales and less payments from customers. Add to this cost of staff Christmas bonuses, various festive jollies and large tax bills just around the corner in January, and…

Read More »

Adrian Mackenzie
18th December 2018 Financial Services Apprenticeship Scheme

We are pleased to announce that our wealth management department are looking to introduce a Financial Services Apprenticeship scheme.   The aim of this scheme is to identify local talented individuals and help them to develop into the next generation of financial advisers/ planners and be part of our successful wealth management team.   Once…

Read More »