Tax Evasion

[JohnD]

stick it there, then. If you are a basic-rate taxpayer, every £780 out of your pocket turns into £1000 in the fund as they reclaim the tax for you. If you are a higher-rate taxpayer every £600 turns into £1,000

You can contribute any amount up to your total taxable earnings.

If you have your own company you save the 12.8% or whatever employer's NI too, provided the company sends the payment and doesn't give it to you as earnings.

You can start drawing some or all of it from your 50th birthday.

 

[Nige F]

Well said John, that`s not even Tax Avoidance How about some in a ISA

 

[JohnD]

Mini-Cash ISAs are good value as Interest is tax-free. But Maxi-ISAs are not very tax free.

No tax rebate when it goes in (unlike pension contribs)

Dividends are taxed anyway. Though if you are a higher-rate taxpayer, you don't have to pay the extra.

No Capital Gains tax on profitable sales within the ISA though. But the annual CGT allowance is fairly generous so most of us don't have to pay it anyway.

Biggest advantage of ISAs is that you don't need to include them on your tax return.

 

[WabbitPoo]

Are you a sole trader or a limited company?

 

[LondonRay]

Well said John, that`s not even Tax Avoidance How about some in a ISA

Actually it is tax avoidance, but tax avoidance (I prefer the term effeciency) is perfectly legal. It's tax evasion that you get an invite to spend some time at her majesty's for.

Anal Moi ?

 

[LondonRay]

stick it there, then. If you are a basic-rate taxpayer, every £780 out of your pocket turns into £1000 in the fund as they reclaim the tax for you. If you are a higher-rate taxpayer every £600 turns into £1,000

You can contribute any amount up to your total taxable earnings.

If you have your own company you save the 12.8% or whatever employer's NI too, provided the company sends the payment and doesn't give it to you as earnings.

You can start drawing some or all of it from your 50th birthday.

Just to be 100% clear you can't stick that £13k in a pension and THEN reclaim the tax, because you haven't paid any tax on it. So the £13k will stay at £13k and not be grossed up by the marginal rate as in the above illustration. That said still the most tax effecient way of saving your dosh if you're not going to need it before you hit 50.

 

[the trician]

I'd give it back to your customer and ask them to pay you so much a month over a few separate tax years - Give free credit if you like.
The wait shouldn't bother you since you have already said you don't really need the money.

 

[JohnD]

that only works if you have tax year when your income is low enough to put you in a lower tax bracket

 

[the trician]

Must be why I have never made a profit for the last 4 years then!

 

[Chri5]

Tax man is getting clever now- they have an application in process to access your personal bank accounts, review the cheques / cash in and ask you to confirm how the money came to be.

Old days of saying "gambling", "gifts", "windfall" etc.. will be ignored and they will demand tax against the funds in that you cannot validate as not income.

Personally I'm of the school that if we all paid tax, then the system adopted in certain newer EU Countries could be extended to the UK.

Rumour is that an across the board 19% flat rate tax system would provide the same level of exchequer income as UK Gov corp get at the moment, but with hidden benefits:-

No VAT
No stamp duty
No IHT
No tax on savings or any investments

Doesn't that sound rather good?

I married an accountant and she's pretty good, tax paid is about 5% of earnings