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Should I pay myself extra salary or extra dividends?

29 Nov 2023 | Tax

Generally, for small Companies, dividends are still more tax efficient than salary because they avoid 13.8% Employer’s National Insurance plus, possibly, 12% Employee’s National Insurance. So usually it’s better to vote, and pay dividends – but it depends on your...

What is the difference between tax avoidance and tax evasion?

16 Oct 2023 | Tax

The phrase ‘Tax Avoidance’ has become associated with dirty practice.  This is because certain celebrities have avoided Income Tax by being paid via things like offshore Trusts – which has led some politicians to moralise about it. These practices are not...

What are Payments on account?

1 Aug 2023 | Tax

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...

What is Salary Sacrifice and why do people do it?

1 Aug 2023 | Tax

‘Salary Sacrifice’ is a mechanism where a formal agreement is made jointly by an employer and employee, to reduce an employee’s salary in return for some other benefit.  The point of this arrangement is generally to save National Insurance – and this saving can then...