Preserving your business income

4th September 2018

It’s the holiday season, many will have recently been or soon be travelling abroad. As well as marvelling at the sights, we will also be struck by how these countries are run, and compare them to life back in home.   It is easy to be jealous of:

  • State pension levels in Sweden
  • Police numbers on Rome’s streets
  • Attainment levels of schoolchildren in Japan
  • Cuba’s healthcare system

Public sector services and social security systems obviously come at a cost, funded primarily from taxation. So, as we aspire to improve our own, it’s interesting to see just how deep into their pockets our neighbours are prepared to dig, to provide this funding.

2015 national tax to GDP ratio:

  • Japan 31%
  • UK           32%
  • Greece 36%
  • Germany 37%
  • Sweden 43%
  • France 45%
  • Denmark 46%

So, the UK public purse is smaller than many of our obvious peers, perhaps as you would expect from the current colour of Government. In the present tide of promises for increased funding for the NHS, social care and public sector pay increases, one could be forgiven for speculating that tax rates will soon rise. The Budget is under four months away and there is already speculation around its content.

Future rate cuts in Corporation Tax could be axed, the new public sector IR35 rules could be extended to private sector contractors, NIC rates linked to NHS funding and a reduction in the VAT registration threshold.

It is an unspoken rule of business that you generate income and value through the business, and then convert this into personal wealth, where you try to both, preserve it and live off it. So perhaps now is a good opportunity to undertake some of this ‘conversion’, whilst the tax costs are relatively modest?

Other items in Blogs
Barbara Nicholas
25th May 2022 A Grim Reap?

We work hard to improve our lot and most of us hope that our loved ones will reap some benefit from our endeavours. But assuming that we don’t manage to spend all the fruits of our labours, the taxman is lurking. And he will take a sizeable chunk if we don’t plan sensibly.   The…

Jake Day
17th May 2022 We’re Hiring: Tax Careers at Whitings

With a vacancy now open for a Trainee Tax Technician in our Bury St Edmunds office, we’d like to give you a closer look at the highlights of choosing a career in tax – and also the highlights of choosing Whitings as your employer. Why choose tax? The common misconception with a career in tax…

Peter Brown
16th May 2022 e-Commerce: Are you finding keeping your business’s records a nightmare?

Understanding how to account for your business’s transactions with online selling platforms can be complicated. Ensuring that you are submitting the correct information to HMRC can be tricky as not all platforms have the same VAT treatment.   A2X could make your life easier by saving you time and headaches from the complex world of…

Louise Bassett
10th May 2022 Defra Announce 50% BPS advance

As farmers face being squeezed with price increases for inputs due to the situation in Ukraine and worldwide gas and energy prices, DEFRA have announced that the RPA will advance 50% of the value of BPS payments to farmers from the end of July 2022 with the balance to be paid from December as normal.…

Luke Bacon
10th May 2022 HMRC starts chasing up SEISS overpayments

HMRC has started to recover overpayments of Self-employment Income Support Scheme (SEISS) grants. From April, HMRC is writing to taxpayers whose entitlement to the fourth or the fifth SEISS grant has reduced by more than £100 to ask them to repay amounts that were overpaid. Entitlement to the fourth and fifth SEISS grants can be affected…

Charlie Whittle
5th May 2022 TRS – Information required and annual declarations

Intended as a companion to: TRS Who should register and when. The TRS will collect information about the trust and its trustees, settlors and other individuals or organisations exercising control. This will include: Name of the trust. Date the trust was created. Whether the trust is an express trust or not. Details of the trust…