What is Salary Sacrifice and why do people do it?

‘Salary Sacrifice’ is a mechanism where a formal agreement is made jointly by an employer and employee, to reduce an employee’s salary in return for some other benefit.  The point of this arrangement is generally to save National Insurance – and this saving can then...

Do I need CIS if I employ a friend?

The wide range of work covered by the Construction Industry Scheme (CIS) includes things like installing conservatories. The rules say, if you pay your friends as employees, (deducting PAYE and National Insurance) you don’t need to register for the CIS scheme. But, if...

What are Payments on account?

If you have recently started trading as a self-employed person, your first income tax bill will be due in the January following your first trading year, and for many it comes as a bit of a shock. This is because your first tax bill, due in the January, will commonly...

Can I pay my husband/wife “wages” to save my business some tax

Many business owners pay their spouse a salary – typically, anything up to the Personal Allowance limit (£12,570 in 2021/22).  If the spouse has no other taxable income, they will not pay tax on their salary – and the business owner saves tax (at 19%, 20% or 40%) on...

How do I register for CIS (the Construction Industry Scheme)?

The Construction Industry Scheme is a scheme that applies to payments to self-employed workers and businesses in the Construction Industry.  Under the scheme tax is deducted from payments and paid over to HMRC. There are two sorts of people that need to register with...

The Triple Tax Lock and why it is bad for taxpayers

In November 2019, Boris Johnson announced that he was freezing income tax, VAT and National Insurance for five years.  It was a key part of the Conservatives’ manifesto and echoed legislation brought in by David Cameron in 2015. The point of the Triple Tax Lock...