Business Owners – Directors Area
Business Directors and Owner Managers of Limited Companies have duel interest in planning to ensure that their company is run tax efficiently and also the profits they make ‘dove tail’ into their own personal financial planning.
When a company is profitable, “what can we do with our profit?”, is one of the main questions asked and this falls into 3 main areas:
1. Leave the money in the Ltd Company Bank Account – Corporation Tax at 19%
2. Withdraw the funds as a Dividend – 20% tax will have been accounted for with a further 20% if into higher rate
3. Move funds into a registered pension scheme in the Business Director’s name – this is classed as a business expense and so reduce the Corporation Tax by 20% – EG. Company Profits £100,000 – Corporation Tax £20,000
If a pension contribution was made of £40,000, the tax bill would be reduced to £12,400 saving £7,600 Tax.
This money is held then in a pension fund and it’s important that the rules are understood around how the new pension works. This careful planning can make a huge difference to future options and tax planning. There is also the option to buy commercial property within pension funds ie office or workshops that can also be of a benefit.
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My main long term objective was to be able to retire early and with Paul’s help I managed to achieve that goal at the age of 57. I will soon be 60 and I am loving it!
Pauls approach was very different and I must say fresh. Paul took the time to get to know me, my business, my financial circumstances and used his knowledge to present relevant options to me. At no point did he sell or push, he guided, listened and observed.
The ‘financial future’ was a scary unknown before and now, well it’s less scary and much clearer – I know what I can do to improve things for myself going forward and feel confident in the advice given.
PH7 Wealth Management.
Good financial planning is key to helping you achieve your future goals and aspirations, at PH7 We work with you on your financial journey ensuring you and your families’ long-term future objectives are secure.
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PH7 Wealth Management Head Office
3rd Floor, Churchill House, 60 Bank Parade, Burnley, Lancashire