[BNM] Save a bit of tax...

[Tom Nixon]

This is for those of you who are company directors using the small salary
and dividends method....

URGENT ACTION TO TAKE BEFORE GORDON BROWN MAKES TAX CHANGES ON WEDNESDAY 6TH
DECEMBER 2006 

A possible extra tax on dividends for owner-managed businesses

Most owner managers of small businesses take their money out through a small
salary, paying no national insurance, topped up with dividends. This saves a
lot of national insurance and tax.

There is a prediction that Gordon Brown is looking at imposing a top up tax
on dividends from when he makes his pre Budget speech next Wednesday
afternoon, 6th December.

If this top up tax was equivalent to the national insurance that is saved
through paying dividends rather than salaries it could be 13% to 24%. So on
a dividend of £30,000 it could be between £3,900 and £7,200!

Obviously we don¹t know what he will do, however it may be prudent to pay
any dividends that you were planning to make up to 5th April 07 before 6th
December 06. Taking this action will not affect your annual tax bill, but it
just may save you an extra top up tax.

If you have any questions please email our tax consultant Margaret Handley.
This is a further example of how Finance Directors provides valuable
information to clients.

Anthony Lamb
4th December 06 


FINANCE DIRECTORS LTD
Telephone: 01444 441236
Email: anthony.lamb at financedirectors.com
Web: www.financedirectors.com