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Introduction The introduction of the Employment Allowance (“EA”) allows employers a discount of up to £2,000 off their liability to Employers’ NIC. This has added another factor into the salary vs dividend debate. There is one other complicating factor as well. The level of other taxable, non-dividend, income enjoyed by the director/shareholder. If there’s no other income A salary equivalent to the director’s personal allowance is most efficient. The additional NIC paid by the director (at 12% on the excess over £8,060) is more than compensated by the additional corporation tax saving at 20%. With no other employees, this works for companies with up to 5 directors/ shareholders. What if the director has other income? Many directors own the company premises, and enjoy a rent from that. Where rent (or indeed any other taxable income) is enjoyed by the director, a little more care is needed. The optimal position would…

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[Originally a guest post on www.owenjonesdesign.com]  Introduction It is a real problem when you are doing something you love isn’t it? You set up your business because you are good at something, or you are passionate about it, or both, but you never seem to make progress. You are busy doing what you love, but somehow it’s not as rewarding as you’d thought it would be. Very often, that is because you are working IN, and not ON your business. What’s the difference? If you are going to reap the rewards of your hard work, then you’ll need to balance these two aspects. Before you can do that, you need to understand what they are. Working in the business This is basically doing the stuff for clients/customers that the business was set up to do. For Owen, this is producing high quality design ideas, and implementing them as part of…

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