Child Benefit Clawback needs ITR

Any household where a parent or their partner has an individual income of more than £50,000 will see at least some of their child benefit clawed back due to the High Income Child Benefit charge. If you have chosen to continue receiving child benefit payments then...

How does paying dividends reduce my Company’s tax bill?

It doesn’t.  A Company pays Corporation Tax on its profits before dividends are paid out.  Consequently, shareholders are treated as having already paid tax on their dividends (called a ‘tax credit’). A shareholder who is paying Higher Rate Tax will have the dividends...

A recent history of Corporation Tax Rates

In recent years, for small companies the Corporation Tax Rate has effectively increased from 20% to 25.07% (small UK business had a 6% rise in tax on profits – including dividend tax!).  Whereas, from 2006/07 to 2017/18, the main Corporation Tax Rate (for more...

Can I pay my wife “wages” to save my business tax?

Many business owners pay their spouse a salary – typically up to the Personal Allowance limit (£11,850 in 2018/19). 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 the salary...

Tax free income

Over the last year or two, and partly to remove some taxpayers from the Tax Return system (because they cost more for HMRC to administer than they pay in tax), certain types of income are not taxable up to a certain level.  So I thought it would be a good time to list...

Explaining HMRC Payments on Account in January and July

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...