TAKE ADVANTAGE OF THE £2,000 EMPLOYMENT ALLOWANCE FROM 6.4.2014
The new £2,000 “employment allowance” that provides relief from paying employers NIC on the first £2,000 of contributions starts 6 April 2014. For many employers the benefit of the £2,000 relief will be obtained in month 1 by reducing employers NIC payable, for others it could take several months before credit for the £2,000 is obtained on a cumulative basis.
This new relief appears to be available to most employers, including one man band companies, and leads us to consider a change of profit extraction strategy from 6 April 2014 as it will be more advantageous to increase directors’ salaries to £10,000 instead of the NIC threshold of £7,956.
The extra £2,044 will save £409 (20%) corporation tax (£818 for two directors) whereas the additional employees NIC would be just £245 each.
Please countant us on 01923 803358 or email on email@example.com to discuss the full implications for your individual circumstances.
Avin Accountants |Blueprint Commercial Centre, Imperial Way, Watford, WD24 4JP | + 44(0) 1923 803358 | Email: info@ avinaccountants.com | web: www.avinaccountants.com |