Tax Changes and Calculating Losses
You will be aware of recent changes to Corporation Tax, Income Tax and Dividend tax rates and allowances following the Mini Budget and Autumn Statement.
These changes will have an impact on how financial losses are assessed in cases involving Claimants operating through their own Limited Company, particularly those with a larger loss and / or involving dividends.
For many years it was safe to assume that the most efficient way to extract additional profits from a Limited Company was by way of dividends. As a result of the recent changes, and depending on the Claimant’s circumstances, this assumption may no longer be the case and alternative methods may need consideration.
Our experienced team can assist in all types of cases involving self employed Claimants and we are fully alive to how these changes will impact on how financial losses are presented in a case.
Contact us today if you have an ongoing or potential case that you may like to discuss.
There are also many other factors that will need to be carefully considered, such as:
- Has the company suffered a reduction in profitability, or has it ceased trading entirely.
- The level of actual and expected profitability of the company and the impact on its marginal corporation tax rate.
- Does the Claimant have other income sources that may utilise their personal allowance and affect their marginal rate of income tax.
- Is the Claimant expected to work beyond their state retirement age.
- Does the Claimant have income in excess of £100,000 and, therefore, their personal allowance would be abated (applies to both actual and or expected levels of income).
- Changes already announced to the tax free dividend allowance.
- Does the Claimant have other dividend income that would utilise their tax free dividend allowance.
To discuss a potential case under no obligation, contact us on 0113 387 5670, email enquiries@forthsonline.co.uk or click here