national insurance contributions
Growing worries about an increase in Capital Gains Tax, currently standing at 18pc, to narrow the gap with the new 50pc top tax rate next April has resulted in business advisers being inundated with "help me" pleas from entrepreneurs seeking to protect their business from further demands from the taxman.
As reported in Your Business last week, many are planning to boost dividend payments to investors to try to shelter some of their income against the higher tax rate for people earning more than £150,000 a year. Others are examining ways to advance bonus payments to escape the initial impact of a tax that tops 60pc after including National Insurance contributions.
Tony Burns, sole director of Claim Angel, founded less than two years ago, has wasted little time in trying to boost his dividend stream before next April after exhaustive talks with advisers.
He said: "I've worked closely with my accountants to set up a system of management accounts on a monthly basis to maximise the amount of dividends we can take out of the company. I don't see why we should hand it over to the taxman.
"We want to take out as much dividend as we can before March 31 but we have to be careful. We have to monitor profits very closely and make sure we don't damage the business."
Mr Burns, 44, a rehabilitated drug addict who works with a staff of six and a team of solicitors in Liverpool handling compensation claims, added: "It's a scary time for business and to have tax going up is just too much.
"We're handling a lot of personal injury claims, including many from wounded servicemen and I don't want to let them down but as a small businessman I'm not getting any help from the Government."
More entrepreneurs are considering moving abroad to escape the new tax regime. A survey by business advisers Tenon of 300 entrepreneurs earning more than £150,000 showed a fifth of them are planning to leave Britain for countries with more favourable tax rates.
Dave King, a director of Nottingham-based Nexus Total Print Solutions considered the emigration option but, with a young family, has decided to stay in Britain and find ways of cushioning the tax leap. He said: "We've been talking with our advisers and they've come up with a clever arrangement to defer tax. We'll ultimately pay less tax but its a perfectly legal arrangement. Why do we have to go to these lengths? Its unfair to see the creative lifeblood of this country being penalised in this way."
HM Revenue & Customs are closely monitoring tax avoidance schemes stimulated by the 50pc rate. "HMRC is aware of various strategies being put forward to mitigate the 50pc income tax rate," a spokesman said. "Ministers may choose to change the law."
Business advisers believe there is little prospect of HMRC intervening to try to stop advance dividend or bonus payments because in any event the Treasury will get an earlier tax if lower tax payment.
The Tenon survey shows entrepreneurs considering emigrating are looking at familiar tax havens such as Monaco, the Cayman Islands and Guernsey.
Tenon is advising clients to move quickly to use up all their tax free allowances with cash or stocks and shares and introducing share schemes which could avoid all income tax and National Insurance liabilities.
Mr Raynor believes the Chancellor will use the Pre-Budget report to try to block the "opportunities for early planning" and fears capital gains will be one of the targets.
George Bull, head of tax at Baker Tilly says the huge gap between capital gains and income taxes is a "clear target."
Growing worries about an increase in Capital Gains Tax, currently standing at 18pc, to narrow the gap with the new 50pc top tax rate next April has resulted in business advisers being inundated with "help me" pleas from entrepreneurs seeking to protect their business from further demands from the taxman.
As reported in Your Business last week, many are planning to boost dividend payments to investors to try to shelter some of their income against the higher tax rate for people earning more than £150,000 a year. Others are examining ways to advance bonus payments to escape the initial impact of a tax that tops 60pc after including National Insurance contributions.
Tony Burns, sole director of Claim Angel, founded less than two years ago, has wasted little time in trying to boost his dividend stream before next April after exhaustive talks with advisers.
He said: "I've worked closely with my accountants to set up a system of management accounts on a monthly basis to maximise the amount of dividends we can take out of the company. I don't see why we should hand it over to the taxman.
"We want to take out as much dividend as we can before March 31 but we have to be careful. We have to monitor profits very closely and make sure we don't damage the business."
Mr Burns, 44, a rehabilitated drug addict who works with a staff of six and a team of solicitors in Liverpool handling compensation claims, added: "It's a scary time for business and to have tax going up is just too much.
"We're handling a lot of personal injury claims, including many from wounded servicemen and I don't want to let them down but as a small businessman I'm not getting any help from the Government."
More entrepreneurs are considering moving abroad to escape the new tax regime. A survey by business advisers Tenon of 300 entrepreneurs earning more than £150,000 showed a fifth of them are planning to leave Britain for countries with more favourable tax rates.
Dave King, a director of Nottingham-based Nexus Total Print Solutions considered the emigration option but, with a young family, has decided to stay in Britain and find ways of cushioning the tax leap. He said: "We've been talking with our advisers and they've come up with a clever arrangement to defer tax. We'll ultimately pay less tax but its a perfectly legal arrangement. Why do we have to go to these lengths? Its unfair to see the creative lifeblood of this country being penalised in this way."
HM Revenue & Customs are closely monitoring tax avoidance schemes stimulated by the 50pc rate. "HMRC is aware of various strategies being put forward to mitigate the 50pc income tax rate," a spokesman said. "Ministers may choose to change the law."
Business advisers believe there is little prospect of HMRC intervening to try to stop advance dividend or bonus payments because in any event the Treasury will get an earlier tax if lower tax payment.
The Tenon survey shows entrepreneurs considering emigrating are looking at familiar tax havens such as Monaco, the Cayman Islands and Guernsey.
Tenon is advising clients to move quickly to use up all their tax free allowances with cash or stocks and shares and introducing share schemes which could avoid all income tax and National Insurance liabilities.
Mr Raynor believes the Chancellor will use the Pre-Budget report to try to block the "opportunities for early planning" and fears capital gains will be one of the targets.
George Bull, head of tax at Baker Tilly says the huge gap between capital gains and income taxes is a "clear target."
