Budget 2004 Summary

Crackdown on small company loophole

As originally feared there has been a crack down on the low tax threshold of small companies. However this only effects companies with profits less than £50,000.If your profits are over £50,00 it is business as usual and tax planning is still as effective as previously.

If your profits are less than £50,000 tax minimisation can only be maximised if you don't physically take your profits out of your company and reinvest them within the company, e.g. buy to let schemes or self-administered pension schemes. Please call me if you wish to discuss either of these proposals further. Generally speaking all these companies will have an additional tax payable amounting to £1900 per annum as result of this budget.

Tax planning opportunities

With the simplification of pension scheme rules coming into effect on 1st April 2005 now is the time to start planning ahead to minimise tax bills and plan for your financial future by effective pension arrangements.