Business advice

[cheshiremaserati]

Very simple.
Sack your IFA, discretionary manager, hedge fund guy, expert, chase d vere tw4t etc etc.
Buy this from whatever source you can and quickly.View attachment 67751

Might be worth stressing the chart is performance for gold bullion, not jewellery. The latter selling price includes making costs and mark-ups. Trading gold jewellery is a mugs game - here the high street jewellers will buy the jewellery at 50% of tge gold rate per gram downgraded proportionately for the carat content.

 

[conaero]

Well, here's an interesting turn up for the books. As I'm in a Serviced Office, part of my rent is to cover my business rates.
This in turn means that I can apply for the £10,000 small business grant.

Might be worth @conaero & @rockits (and anyone else) to contact your local council to do the same.
All councils have a very simple on line application to fill out and it only takes 5 minutes.

This is the blurb I was sent, which makes for interesting reading. And hence my application.

Small Business Grants Fund and Retail, Hospitality and Leisure Grant Fund

The Council are planning to make Small Business Grants (£10k) and Retail, Hospitality and Leisure Grants (£10k and £25k)
payments as soon as possible. The Council is currently waiting finalisation of our required system upgrade from our software provider to enable these payments to be made, which they are now in the final stages of testing.

An application form will need to be submitted to apply for these grants to ensure the Council meets government requirements to make the relevant payments. Standard business information will need to be collected and the form to do this is currently being finalised and will be released shortly. We have identified those that may be entitled to this relief and you will be notified soon of how to apply for this grant.

Extended Retail, Hospitality and Leisure Discount 2020/2021 and Nursery Discount 2020/2021

The Council is waiting for final details from our software provider to upgrade our systems to enable the 100% discount to be applied to businesses that we have identified as being entitled to the above reliefs.

In the meantime, direct debits have been cancelled and payment will not be requested from bank accounts for this category of business. As soon as possible accounts will be updated and Business Rate demands will be issued confirming the relief has been applied to accounts with a nil liability for 2020/21.

Kind regards

Yep already on that one thanks. Apparently no need to apply they just send the money...we will see

 

[Ewan]

I agree Matt. Money should be sent automatically. But as you say, let’s see.

 

[DavidL]

We had a letter saying we had "identified" as possibly being eligible. I expected that and it came yesterday with a link to a fairly basic form. They acknowledged that and paid today. It seems nice today but it won't last that long as we have virtually zero business for the foreseeable. I'm just trying to persuade the landlord that full rent payments aren't happening!
Best of luck all.

 

[outrun]

Here's a good guide with all the links required that has been put together by Deloitte. They update it every day after the press conference. Click on the download link on the page to get the guide. It also covers other countries for anyone with overseas staff or other business etc.

https://www2.deloitte.com/uk/en/pag.../covid19-uk-government-funding-response.html#

 

[GeoffCapes]

Yep already on that one thanks. Apparently no need to apply they just send the money...we will see

We were advised to apply on the council website to ensure we got the money promptly.
Otherwise how will they transfer the money? Sending a cheque defeats the object does it not?

 

[Rees2301]

Yep already on that one thanks. Apparently no need to apply they just send the money...we will see

Local Authority websites have links on business support pages to apply. Pretty straightforward to complete. Includes asking for your bank details and ours stated payments should be in early April.

 

[MarkMas]

They ain't gonna lobby the Government and if they did, they wont be listened to. The Chancellor came to this decision in consultation with key bodies. The priority is on the worst off in society (strange but true) not on limited company directors who have taken dividends at 7.5% tax and nil NI and have probably kept retained profits in the business for a rainy day. I am sure any sensible accountant would advise them to do this - pay the 7.5% dividend tax when you have to break into the piggy bank (and yes, I know there is a nil rate dividend band of £2k before some clever accountant or accountant to-be in aspiration tells me I don't know what I am talking about..

This is bothering me, still.

Many limited company directors may not be 'the worst off in society' but they are small business people basically working for themselves in tiny companies, and they have incorporated mainly because they have been required to by their clients or quite reasonably seek to avoid unlimited personal liability.

The choice to pay themselves partly or mostly through dividends is not some 'fat cat' scheme dreamed up by lawyers in the Cayman Islands, but a legitimate option made available to them by normal UK legislation and HMRC rules.

The tax advantage is certainly NOT 'pay 7.5%' vs 'pay 40%', but it is complicated and I don't know the details. I seem to recall my accountant saying it was 'pay 21%' or 'pay 25%'.

Any such tax advantage is a tiny privilege for going without sick pay or holiday pay, and bearing loads of personal income risk. If the proposal I have been working on all month is not accepted, then I make no money. Big company employees in PAYE tend to get paid whether they work or not.

And I am not taking advantage in other ways as some do. I have not declared Verbier as a suitable place to go on a February business research trip (unlike 80% of those on a recent 'boys' ski trip), I have not made my wife redundant to collect £30,000 tax free (as a friend of mine did, twice), and my children's mobile phones are not company phones.

It seems to me ridiculous if a, say, a painter & decorator with billings of £26,000 per year, which he has been taking out of his company through PAYE can get £1,700 a month, but if he has been taking it out through £10,000 of salary and £16,000 of dividend he gets £600. (I suppose you could think of that as a 65% tax rate on the payouts - doe that seem fair?) And if he and his wife work together in the business and were billing £52,000 a year between them, then they get nothing.

 

[DaveT]

We were advised to apply on the council website to ensure we got the money promptly.
Otherwise how will they transfer the money? Sending a cheque defeats the object does it not?

Just been on a webinar with my accountants and they said the same - Govt says they will be in touch but most Local Authorities have a form on their website.

True in most cases, but the one local to my office (Dacorum) still does not. So I will just keep checking the website/postbox daily.

 

[doodlebug]

The tax advantage is certainly NOT 'pay 7.5%' vs 'pay 40%', but it is complicated and I don't know the details. I seem to recall my accountant saying it was 'pay 21%' or 'pay 25%'.

Not quite Mark.

• 7.5% Basic rate. The basic rate is paid on taxable income over the Personal Allowance to £37,500.
• 32.5% Higher rate. The higher rate is paid on taxable income over the Personal Allowance from £37,501 to £150,000.
• 38.1% Additional rate. The additional rate is paid on taxable income over £150,000.

Obviously if you take a basic salary, this is taxed at the usual rates and the dividend payments are added on to the basic salary to calculate the tax payable. For example, if you pay yourself a salary just shy of the amount where you would pay 40%, any dividends that take you over £37500 taxable will be taxed at 32.5%.

 

[CatmanV2]

Not quite Mark.

• 7.5% Basic rate. The basic rate is paid on taxable income over the Personal Allowance to £37,500.
• 32.5% Higher rate. The higher rate is paid on taxable income over the Personal Allowance from £37,501 to £150,000.
• 38.1% Additional rate. The additional rate is paid on taxable income over £150,000.

Obviously if you take a basic salary, this is taxed at the usual rates and the dividend payments are added on to the basic salary to calculate the tax payable. For example, if you pay yourself a salary just shy of the amount where you would pay 40%, any dividends that take you over £37500 taxable will be taxed at 32.5%.

Is this specific for small companies or something?

Band	Taxable income	Tax rate
Personal Allowance	Up to £12,500	0%
Basic rate	£12,501 to £50,000	20%
Higher rate	£50,001 to £150,000	40%
Additional rate	over £150,000	45%

I only ask cos the above is what's on HMRC....


C

 

[Ebenezer]

Talking about tax on dividends. Most small company directors pay themselved the majority of their income via dividends as it attracts less tax and also means that they can pay themselves a small salary and minimise / avoid employers and employee NI
This is what IR35 is seeking to redress
Eb

 

[CatmanV2]

Are those the tax rates on dividends then?

C

 

[cheshiremaserati]

Is this specific for small companies or something?

Band	Taxable income	Tax rate
Personal Allowance	Up to £12,500	0%
Basic rate	£12,501 to £50,000	20%
Higher rate	£50,001 to £150,000	40%
Additional rate	over £150,000	45%

I only ask cos the above is what's on HMRC....


C

You are forgetting to take the tax free personal allowance off those tax bands. So 20% up to £50,000 is the £37,500 earnings over the nil rate tax allowance. The dividend tax rates are different as someone else has posted. 7.5% /32.50% and 38.10% based on total income. So if total income with dividend remains under £50k, the dividend rate of tax is 7.5% but 32.5% for a higher rate tax earner. And if total earnings goes to over 150,000 (or £137,500 after the nil rate personal allowance) then dividend tax is 38.10%

 

[CatmanV2]

You are forgetting to take the tax free personal allowance of those tax bands. So 20% up to £50,000 is the £37,500 earnings over the nil rate tax allowance. The dividend tax rates are different as someone else has posted. 7.5%/32.50% and 38.10% based on total income. So if total income with dividend remains under £50k, the dividend rate of tax is 7.5% but 32.5% for a higher rate tax earner.

Gotcha

C

 

[cheshiremaserati]

This is bothering me, still.

Many limited company directors may not be 'the worst off in society' but they are small business people basically working for themselves in tiny companies, and they have incorporated mainly because they have been required to by their clients or quite reasonably seek to avoid unlimited personal liability.

The choice to pay themselves partly or mostly through dividends is not some 'fat cat' scheme dreamed up by lawyers in the Cayman Islands, but a legitimate option made available to them by normal UK legislation and HMRC rules.

The tax advantage is certainly NOT 'pay 7.5%' vs 'pay 40%', but it is complicated and I don't know the details. I seem to recall my accountant saying it was 'pay 21%' or 'pay 25%'.

Any such tax advantage is a tiny privilege for going without sick pay or holiday pay, and bearing loads of personal income risk. If the proposal I have been working on all month is not accepted, then I make no money. Big company employees in PAYE tend to get paid whether they work or not.

And I am not taking advantage in other ways as some do. I have not declared Verbier as a suitable place to go on a February business research trip (unlike 80% of those on a recent 'boys' ski trip), I have not made my wife redundant to collect £30,000 tax free (as a friend of mine did, twice), and my children's mobile phones are not company phones.

It seems to me ridiculous if a, say, a painter & decorator with billings of £26,000 per year, which he has been taking out of his company through PAYE can get £1,700 a month, but if he has been taking it out through £10,000 of salary and £16,000 of dividend he gets £600. (I suppose you could think of that as a 65% tax rate on the payouts - doe that seem fair?) And if he and his wife work together in the business and were billing £52,000 a year between them, then they get nothing.

We all have choices and make our decisions with the best information and prospects in mind at that time. When the time changes, the decisions that were right then, might no longer be the best-fit today. One thing for sure, self-employed (and not Limited Company Directors) who have been keeping profit declaration low and VAT low by taking cash-in-hand payments will feel the pressure now.

 

[cheshiremaserati]

This is bothering me, still.

Many limited company directors may not be 'the worst off in society' but they are small business people basically working for themselves in tiny companies, and they have incorporated mainly because they have been required to by their clients or quite reasonably seek to avoid unlimited personal liability.

The choice to pay themselves partly or mostly through dividends is not some 'fat cat' scheme dreamed up by lawyers in the Cayman Islands, but a legitimate option made available to them by normal UK legislation and HMRC rules.

The tax advantage is certainly NOT 'pay 7.5%' vs 'pay 40%', but it is complicated and I don't know the details. I seem to recall my accountant saying it was 'pay 21%' or 'pay 25%'.

Any such tax advantage is a tiny privilege for going without sick pay or holiday pay, and bearing loads of personal income risk. If the proposal I have been working on all month is not accepted, then I make no money. Big company employees in PAYE tend to get paid whether they work or not.

And I am not taking advantage in other ways as some do. I have not declared Verbier as a suitable place to go on a February business research trip (unlike 80% of those on a recent 'boys' ski trip), I have not made my wife redundant to collect £30,000 tax free (as a friend of mine did, twice), and my children's mobile phones are not company phones.

It seems to me ridiculous if a, say, a painter & decorator with billings of £26,000 per year, which he has been taking out of his company through PAYE can get £1,700 a month, but if he has been taking it out through £10,000 of salary and £16,000 of dividend he gets £600. (I suppose you could think of that as a 65% tax rate on the payouts - doe that seem fair?) And if he and his wife work together in the business and were billing £52,000 a year between them, then they get nothing.

We all have choices and make our decisions with the best information and prospects in mind at that time. When the time changes, the decisions that were right then, might no longer be the best-fit today. One thing for sure, self-employed (not Limited Company Directors) who have been keeping profit declaration low and VAT low by taking cash-in-hand payments without full invoicing will feel the pressure now. They certainly don't get any sympathy from me.

 

[doodlebug]

Is this specific for small companies or something?

Band	Taxable income	Tax rate
Personal Allowance	Up to £12,500	0%
Basic rate	£12,501 to £50,000	20%
Higher rate	£50,001 to £150,000	40%
Additional rate	over £150,000	45%

I only ask cos the above is what's on HMRC....


C

Sorry, I was talking about tax on dividends.

 

[doodlebug]

You are forgetting to take the tax free personal allowance off those tax bands. So 20% up to £50,000 is the £37,500 earnings over the nil rate tax allowance. The dividend tax rates are different as someone else has posted. 7.5% /32.50% and 38.10% based on total income. So if total income with dividend remains under £50k, the dividend rate of tax is 7.5% but 32.5% for a higher rate tax earner. And if total earnings goes to over 150,000 (or £137,500 after the nil rate personal allowance) then dividend tax is 38.10%

This is Taxable Income, which by definition excludes the tax-free allowance.

 

[doodlebug]

You are forgetting to take the tax free personal allowance off those tax bands. So 20% up to £50,000 is the £37,500 earnings over the nil rate tax allowance. The dividend tax rates are different as someone else has posted. 7.5% /32.50% and 38.10% based on total income. So if total income with dividend remains under £50k, the dividend rate of tax is 7.5% but 32.5% for a higher rate tax earner. And if total earnings goes to over 150,000 (or £137,500 after the nil rate personal allowance) then dividend tax is 38.10%

You are also forgetting the sneaky tax increase for those earning between £100k and £124k. The personal tax-free allowance is reduced by 50p for every pound earned over £100k. which means any income over this is marginally taxed at 60% until income over £124k, whereby the marginal rate reverts back to 40%.