Savings & InvestmentsIndividual Savings Accounts (ISA’s)

As title states, only applies to Individuals, not businesses

Cash Isa – current maximum £ 5760 p.a.

Stocks and shares Isa – current maximum £11520 p.a.

No tax to pay on either the Income or Growth

Savings & Investments

Stocks and shares ISA – long term savings plan

Should be undertaken for 5 years or if stopped earlier then balance left for the remaining period to obtain best chance for growth

Huge number of funds – cheapest are usually trackers which tend to outperform most “managed funds”

Income TaxPersonal Allowance trap As is well known, there is a nasty tax trap by reference to

the gradual withdrawal of the personal allowance if taxable income exceeds £100,000.This is via a reduction of £1 of allowance for every £2 of excess taxable income. Effective tax rate in this band is 60%

If possible, structure your income so it falls less than £100K. If more than £100K consider a lump sum pension

PensionsStill very tax efficientTax relief when contributions made Tax free growth prior to retirement25% tax free pot on retirementIncome drawdown facility enables you to be as tax

efficient as possibleStart now before it is too late – Auto enrolment starts

soon

How to earn over £40K with no taxTax PlanningPay small salary of £640 per month – provides for full

credit towards State PensionPay dividends of £30300 to cover Basic Rate Threshold Total Income will be £41450 – No Personal Tax or

National InsuranceHusband and wife who own their own company can take

£82900 without any tax or NI. Corporation tax will have been paid on profits but only at 20%

Should I Incorporate?Sole TraderProfits £45,000Income Tax £ 7,884Class 4 Nat.Insurance £ 3,189Class 2 Nat. Insurance £ 138Total Income £33,789

Should I Incorporate?Limited Company – 1 DirectorProfits £45,000Salary £ 7,680Taxable Profits £37,320Corporation Tax @ 20% £ 7,464Available for dividends £29,856Add back Salary £ 7,680Total Income £37,536Extra Income from Incorporation £ 3,747

Free holidays !!!

Would you like a FREE HOLIDAY courtesy of The Chancellor of the Exchequer?

1 week in Tenerife for a family of 2 adults and 2 children with Thomson Holidays at 4* Hotel £1655 (Riu Arecas Hotel Costa Adeje)

Nursery Voucher Scheme

Childcare vouchers can save many parents with kids aged up to 15 over £1,000 a year on childcare. Frustratingly it is only available via employers, but many large and small companies take part.

The key is they enable you to pay for childcare out of your PRE-TAX and National Insurance income. While this doesn’t sound much, the benefit is huge.

Nursery Voucher Scheme

Basic rate tax payers (and higher/top rate payers who joined before 5 April 2011 as long as they don't take a break from the childcare voucher scheme of more than 12 months) can pay for up to £243 of childcare with vouchers each month (£55/week). This is PER PARENT so two working parents could get £486 a month of vouchers.

Nursery Voucher Scheme

From 6 Apr 2011 new joiners paying higher or top rate tax had their allowance dropped so that all tax payers have roughly the same maximum tax gain. From April 2013 the limits are:

Basic (20%) Taxpayer. £55/week vouchers, max annual gain £930.

Higher (40%) Taxpayer. £28/week voucher, max annual gain £630.

Top (45%) Taxpayer. £25/week voucher, max annual gain £590.

Nursery Voucher SchemeUsed for :NurseriesChildmindersPlay SchoolsPre-SchoolsCréchesNanniesAu Pairs

Nursery Voucher Scheme

Before and After School ClubsHoliday Clubs/CampsPlay SchemesPrivate SchoolsReception Classes and out of school care at Independent

Schools

Nursery Voucher SchemeThe number of children you have doesn't impact this, the

limits are the same whether you've one child or an entire Brady Bunch.

Vouchers aren't specific to each child and have a long expiry date, so if you know you're going to have higher childcare costs during the holidays collect vouchers in advance.

Also many providers will let you backdate vouchers up to six months, although your child must be born for you to be able to sign up. Check your individual provider's procedures first.

Nursery Voucher Scheme

Admin is relatively simple – Just obtain a pack from one of the companies who will do it for you (for a fee of course) and away you go!!

Tax Savings for allQuestions

Robert Ellis – Principal Peter Way-Rider – Tax Manager

Tel 01244 343504 www.ellis-uk.com info@ellis-uk.com