phone 0800 0811 567  email info@2tax.co.uk

 
 
 
 

Dividend versus Wage versus Sole Trade

Having worked hard all year to make a profit you now find the Inland Revenue ready to take their share. How do you extract this profit as tax efficiently as possible ?

  1. Let them take what they want. 

  2. Calculate what you must pay. 

  3. Plan your affairs so that you retain as much as possible. 

If you answered 1) or 2) then we commend your altruistic nature. If you answered 3) then you need to talk to Wagner Associates, Chartered Accountants in Glasgow. We don't just calculate your tax bill (the Revenue can do that for free). We look at ways to plan your finances, offering practical solutions that allow you to keep more of the money you worked so hard to earn.

See below as an example of the amount of tax that can be saved in one specific exercise. This is only a narrow example of tax savings and there are infinite different combinations of ways to save tax depending on each tax payers individual circumstances. Income tax, Corporation tax, VAT, PAYE, NIC, Stamp duty, Company car tax, CGT, IHT and Business rates.

The numbers are based on tax year to 5th April 2013.

 

£'000 £'000 £'000   Husband/Wife equal split

Wage

Sole

Trade

Dividend   Dividend




 
Profit before tax 100 100 100   100




 
tax and NIC (48) (34) (29)   (18)




 
Net Receipt 52 66 71   82
saving
£13,811 £18,851   £30,348
saving as % of net wage receipt 27% 36%   58%
           

£'000 £'000 £'000   Husband/Wife equal split

Wage

Sole

Trade

Dividend   Dividend




 
Profit before tax 47 47 47   47




 
tax and NIC (16) (12) (8)   (6)




 
Net Receipt 31 35 39   41
saving
£3,846 £7,832   £9,420
saving as % of net wage receipt 12% 25%   30%
 

Do call us on 0800 0811 567 or email me for a no obligation chat.


Help with tax, costs, cash-flow, profitability ?

Contact WAGNER Associates in either Glasgow or Edinburgh to find out how our services can improve your business performance.

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