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Tax reduction scheme?

Discussion in 'General Business Forum:' started by Dazzer21, Jan 22, 2011.

  1. Dazzer21

    Dazzer21 Member

    One of the companies I work for filled me in the other day (bearing in mind the time of year we're at) on how they handle their tax affairs - one of the directors was telling me how he had a reduced tax bill this year due to his accountant's clever, legal, manipulation of the system.

    One seemed a no-brainer when I heard it but I'm wondering how easy it would be to manipulate from a freelancer's perspective - they run TWO companies, which means they have twice the amount of non-taxable allowance and they run one at a loss.

    Consequently, they are way bigger than I'll ever be, yet they are paying less tax than me!!! Is anyone on here a real whizz on this sort of thing and can maybe share some knowledge to help us one-man-bands be more efficient in these trying times?
  2. Levi

    Levi Moderator Staff Member

    I suppose a freelancer could run 2 businesses in the sense that one is focused on say web and the other graphic design.

    Although I'm taxed as a person (trading as company name) on my earnings minus business expenses so not sure how it would work for us... ltd businesses have a few more expenses to pay out compared with us iirc.
  3. Jimlad

    Jimlad Well-Known Member

    Someone tried to persuade me to do this once, but it was in partnership with someone I didn't really trust so I steered clear.

    Sure it sounds legal enough on paper but it doesn't seem right somehow.
  4. bigdave

    bigdave Moderator Staff Member

    The best thing to do is see your accountant and ask their advice. They know your business and you're paying them to save you money so you may as well use them.

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