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Advising On Remuneration Plans

In December 2021, we spoke with a client who had 2 employments, one of which related to a business he owned. He generated salaries from each employment which were expected to be £125,000 in total. At that level, he was entitled to no personal allowances and asked us to review his position.

The marginal rate of income tax where your income is between £100,000 and £125,000 is over 60% and our client indicated that he had surplus income.

How we helped our client

Our advice was twofold:

1. Focusing on the salary he controlled, he took no salary from his own company, instead swapping it for pension contributions paid for by his company.

2. In conjunction with his financial adviser, he invested money in a Venture Capital Trust, which ensured he received a 30% tax relief on his investment and no tax on any interest received.

The outcome was a saving in personal tax of over £12,000, and a very happy client.

Taking some advice and planning your remuneration carefully can pay huge dividends for you. If you are looking for great tax advice, please email our EQ Taxperts or call one of our offices.

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