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Budget Brief 2012
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HMRC – Targets – Electricians’ Tax Safe Plan campaign
HMRC are giving an opportunity to people working in the electrical industry, and have not told HM Revenue & Customs (HMRC) about all your income and now want to get your tax affairs back on track, use the Electricians’ Tax Safe Plan (ETSP).
An electrician is anyone who installs, maintains and tests electrical systems, equipment and appliances under stringent safety regulations.
How can you avoid Tax penalties for your undeclared income:
How to notify HMRC under the ETSP
To take advantage of this campaign you must:
1. Notify HMRC of your intention to take part in the campaign by 15 May 2012. At this stage you only need to tell HMRC that you will be making a disclosure.
2. Once you have done this, you must make your disclosure and pay what you owe by 14 August 2012.
Contact us for assistance on Tel No 07921885839 and we can help you sort out your tax affairs.
If you are an electrician this guide explains how you can tell HMRC of your previously undisclosed income and pay what you owe.
Planning for minimising tax
This paper compares the best method of minimising taxes for a company with Pre-tax profit spend of £20,000. The paper compares tax impact on by either taking a Salary, Dividend distribution or pension contribution.
The following assumptions have been made in this illustration:
Basic tax rate applies
Small Companies Corporation Tax applies (20%- 2011/12)
The additional £17,730 slice of Salary is applied at higher rate of Income tax (40%) and 1% employee NIC
An Employer pension contribution of £20,000 will be tax deductible
The Tax treatment depends on individual circumstances for each client and may be subject to change in future.
| Salary | Dividend | Pension Contribution | |
| Pre-tax Cost to Company | £20,000 | £20,000 | £20,000 |
| Employer’s NI (12.8%) | £2,270 | ||
| paid as Salary | £17,730 | ||
| Corporation Tax 21% | Nil** | £4,200 | Nil |
| Salary* | £17,730 | ||
| Less Income Tax (40%) | £7,092 | ||
| Less National Insurance 1% | £177 | ||
| Dividend Distribution | £15,800 | ||
| Less Additional Income Tax Due | £3,950 | ||
| Benefit to individual | £10,461 | £11,850 | £20,000*** |
* Assumes taxable income below £150,000
** Nil Corporation Tax due before is full tax allowable
*** Income from this pension will be taxable
This publication is for informational purposes only. Opinions expressed should not be construed as tax planning or accountancy advice. The particulars of any person’s concerns and circumstances should be discussed with a qualified accountant and tax advisors prior to making any decision. Genesys Business Services provides accounts, Payroll, tax planning, property accounts and tax services. Ask for a free consultation.
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