I had a friend that years ago had worked out that with his given rate of tax and National Insurance, he was effectively working for the Government until mid afternoon on a Tuesday before he made any money for himself.
Given our current levels of tax, I wonder what he’d make of things now?
He could well be working until late Thursday with top rates of tax being 50%.
We know that reducing the tax burden is one of the 5 key concerns of our clients and that this has never been more acute. I hear from people on a daily basis that they are looking for ways to pay less tax.
Interestingly, they always want to look to the esoteric methods rather than the tried and tested.
So please speak to your adviser and make sure you’re maximising your ISA allowance, pension contributions, CGT annual exemptions, IHT allowances – use a relevant life policy through your limited company if your able and save corporation tax on your life cover premiums.
If you want more, then certainly look at the improved tax breaks Venture Capital Trusts & Enterprise Investment Schemes offer since the last budget (be well aware of the higher levels of risk that might be involved here.)
In short, pay your tax but make sure you take full advantage of the ways you can pay less.
I’ll be discussing the ways you can use financial planning tools to save tax in more detail in the coming weeks.
Call me anytime to discuss this further or any other aspect of your financial planning needs.
Roland Oliver