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How we've helped clients in the past...
We thought it might be useful to demonstrate how our services have helped
our clients in the past by way of a few case studies.
Business Expansion:
We were put in touch with a business that was looking to expand and buy new premises. They had approached their bank who were happy to lend the £150,000 required, as long as the business came up with a £65,000 deposit. However, the firm only had £25,000.
Having discussed the options the clients were delighted to find they could use their pension fund to buy the property.
The four owner/directors each had limited pension savings, which they'd not contributed to for several years, worth around £18,000. They used £55,000 of this for their deposit and their pensions, once moved in to suitable pension plans, borrowed the balance.
When they'd moved in to their new offices the business paid a market rent to its new landlord - the pension funds - and this funded the loan taken out to finance the property purchase. Not only was the new rent to the pension funds £200.00 per month less than they were paying in their previous property, they received tax relief on the payment, as it was a contribution to a pension scheme.
Tax Planning:
Following our initial meeting with a manufacturing company, it became clear we could help the two owner/directors significantly increase their 'take home' pay, without taking any more money out of the company.
Each director received a salary of £25,000, the company turnover was around £50,000 and the profits were around £20,000.
By reducing their salary to £5,000 each and paying them a dividend of £18,250, their 'take home' pay was increased by over £4,500 per annum. However, the cost to the company was virtually the same. Crucially the expenditure which decreased was the income tax and NI for the employee, together with the gross remuneration and NI for the employer. See the table below for more details.
| EMPLOYEE'S POSITION: |
Current Remuneration Structure: |
New Remuneration Structure: |
| |
|
|
| Salary: |
£25,000.00 |
£5,000.00 |
| Net Dividend: |
£0.00 |
£18,250.00 |
| Income Tax on Salary: |
£4,134.30 |
£0.00 |
| National Insurance Contribution: |
£2,195.16 |
£0.00 |
| Additional Tax on Dividend: |
£0.00 |
£0.00 |
| Net Income: |
£18,670.54 |
£23,250.00 |
| Difference in Net Income: |
- |
£4,579.46 |
| COMPANY'S POSITION: |
Current Remuneration Structure: |
New Remuneration Structure: |
| |
|
|
Salary: |
£25,000.00 |
£5,000.00 |
Net Dividend: |
£0.00 |
£18,250.00 |
Pension Payment: |
£0.00 |
£0.00 |
Additional Pension Payment: |
- |
£0.00 |
Employer's National Insurance Contribution: |
£2,554.37 |
£0.00 |
Corporation Tax: |
£3,800.00 |
£8,085.33 |
Total Employer Cost: |
£31,354.37 |
£31,335.33 |
Difference in Employer Cost: |
- |
£19.04 |
Full Financial Planning Audit :
We recently helped a couple reduce the amount they pay for their protection policies by 34%. By reviewing the whole of the protection market, we replaced the policies with plans from more competitive providers, without reducing their cover or benefits.
| Type of Cover: |
Previous Expenditure: |
New Expenditure: |
| |
|
|
Total Life Cover - Mr |
£27.13 |
£13.30 |
Total Life Cover - Mrs |
£16.22 |
£9.71 |
Total Life Cover - Joint |
£75.08 |
£46.99 |
- |
- |
- |
Total Critical Illness Joint |
£54.01 |
£35.45 |
- |
- |
- |
Total Income Protection - Mr |
£34.01 |
£23.05 |
Total Income Protection - Mrs |
£28.26 |
£20.24 |
Total Private Medical Insurance - Family Cover |
£66.89 |
£49.18 |
- |
- |
- |
Total Monthly Expenditure |
£301.60 |
£197.92 |
This lead to a total annual saving of £1,244.16.
These are just a few examples of how we have been able to help some of our clients in the past. Why not let us see what we could do for you and your business. Call us today, we'd love to hear from you! |
