Are you maximising your company’s financial potential by ensuring that your business is working as tax efficiently as possible? It could well be the case that there are changes you could make to your business’s financial structure that would improve your salary and, therefore, your take home pay. This case study demonstrates how AEON helped one client to do this by reducing his National Insurance bill.
|The problem:||Paying too much tax and National Insurance on your income|
|The benefit:||Taking income from your business more tax efficiently|
|Suitable for:||All business owners|
Mick was a 100% shareholder in his own limited company. He was paying himself a salary of £28,000 and the total cost of funding this, after taking into account company National Insurance, amounted to £30,830. After tax and National Insurance Mick’s net pay amounted to approximately £21,572.
By re-arranging the structure of his pay, we were able to reduce the company National Insurance bill to £249 and more significantly increase his take home pay to £27,812.
The combined financial advantage for Mick and his company amounts to a staggering £8,931 p.a. which represents over 30% of his salary! These savings were made by making use of mainstream tax allowances. Based on current tax and National Insurance rates these savings could continue for up to five years. After that time the savings would be reduced but would still be significant.