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The correct way with directors’ NICs

2019-08-23T16:22:52+01:00August 4th, 2019|Categories: Blog, PAYE|Tags: , , , |

In certain situations the non-cumulative nature for calculating employee Class 1 National Insurance Contributions (NICs) makes it possible to manipulate earnings to reduce the overall amount payable by taking advantage of the lower rate of primary Class 1 contributions payable once the upper earnings limit has been reached. This means that that an employee who is paid £2,000 each month of the year will pay considerably more in primary contributions than someone who is paid £600 for 11 months and £23,400 for one month, even though their total earnings for the year are the same. Company directors often have [...]

Checking directors’ expenses

2019-09-02T11:21:32+01:00March 4th, 2019|Categories: Blog, Taxation|Tags: , , , |

As 31 March approaches, many companies will be getting ready to tie up tax matters for their financial year-end. Now is a time to ensure that everything is in order regarding directors' expenses and review loan account record-keeping procedures. This is particularly so as HMRC report that they commonly find errors in relation to directors' loan accounts when making routine reviews of company tax returns. The statutory rules for computing taxable profits exclude companies from deducting expenditure unless it is incurred 'wholly and exclusively' for the purposes of the trade. As companies are separate legal entities that stand apart from [...]