Working within current legislation, we offer a range of solutions to directors, partners and business owners looking to extract funds from their limited companies without suffering a punitive Higher Rate Income Tax charge. Working within current legislation, we are able to provide a range of solutions to Company Directors ranging from successful privately owned businesses to major international corporations.
Changes in tax rules over the past few years mean that those who are taxed as self-employed now enjoy a considerable advantage over those who are taxed as employees. We assist business owners, whether directors or partners, to benefit from this difference by structuring their remuneration so that it’s taxable as income from self-employment.
The result is that those individuals using this planning can receive, after taxes and fees are paid, in excess of 80% of their total gross remuneration, even at levels at which Higher Rate Income Tax would normally be payable. These arrangements have been reviewed by leading tax counsel and, importantly, are not subject to DOTAS (Disclosure of Tax Avoidance Schemes) and are not affected by the General Anti Abuse Rule (GAAR).
Our remuneration planning is suitable for those who wish to draw an income of at least £50k per annum and we offer, in particular:
- Remuneration planning for Company directors
- Remuneration planning for Healthcare professionals who are either a limited company director or self-employed
- Remuneration planning for Contractors running a personal service company or who are self-employed
- Remuneration planning for IFAs
- Remuneration planning for Partners in a partnership
- Remuneration planning for Barristers
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“When you receive a repayment of income tax of £48k that you had no idea was coming, you can’t help but celebrate!”
“With the amount of tax I’ve already saved using the remuneration planning strategy, I’ve paid deposits on a portfolio of eight properties.”
Client Case Studies
Dr Rhodes saves almost £40,000
- Surgeon earning in excess of £150k salary
- Also does private work through a limited company generating £150k per annum before tax
- Wants to draw as much as possible from his company to fund a property portfolio
- Has £40k per annum more to spend per annum using our remuneration planning
Dr Rhodes is employed, full-time, as a surgeon. Earning in excess of £150,000 per annum, he pays income tax at a marginal rate of 45%. In addition to his salaried employment, Dr Rhodes also does a significant amount of private consultancy work and, on the advice of his accountant he set up a limited company a number of years ago as a vehicle for invoicing his private work. His company generates annual pre-tax profits of around £150,000, on which it pays approximately £30,000 in corporation tax. This leaves Dr Rhodes with £120,000 of company profit which he can take as dividend. He enjoys a high standard of living and is keen to build a private property portfolio, so he needs to take the £120,000 out of his company as a dividend each year. Doing this cost him £36,667 in income tax, payable via his self-assessment tax return. So, with corporation tax of £30,000 and income tax of £36,667, he suffers a total tax burden of 66,667. That’s 44.4% of the £150,000 his company generated.
Using our remuneration planning strategy, we were able to reduce the total burden on Dr Rhodes from £66,667 to just £27,000. It’s important to point out here that the £27,000 doesn’t just take into account the tax he has to pay, but includes our fees too. This gives Dr Rhodes an additional £39,667 of net income per annum which he is using to put down deposits on his property portfolio. It has been a smart move as, by utilising our planning, Dr Rhodes is now building a sizeable asset base for his family.