While commenting on the GDP growth and what it indicates about the economy, the Prime Minister again drew attention to National Insurance.
The article released by the Prime Minister’s Office noted that the progress in the economy has allowed them to bring down taxes, particularly the recent cuts in National Insurance.
The article went on to say: “We think it’s unfair that workers pay two taxes on their income – income tax and National Insurance – when those who earn their income from other sources only pay income tax. That’s why we want to keep cutting National Insurance until it’s gone.”
Likely part of an election strategy, but this again confirms that we can expect further cuts to National Insurance.
The lack of National Insurance to pay on dividend payments is a key reason why many company shareholders choose a blended salary/dividend approach to extract money from their company. However, cuts to National Insurance will lessen the tax advantages that dividends bring.
The cuts that have already been made mean that taxpayers in certain situations will want to review their profit extraction strategy. Future cuts will likely mean more need to do this.
If you are unsure about your profit extraction strategy please feel free to get in touch with us and we will be happy to carry out a personalised review for you.
See: https://www.gov.uk/government/news/what-does-gdp-growth-mean-for-me
Dealing with HM Revenue & Customs (HMRC) can sometimes be challenging. Long wait times when phoning for help, incorrect refund amounts, errors in tax codes and other issues can cause frustration. In recent months and years the decline in service standard from HMRC has been notable, but did you know that it is possible to complain about HMRC and even receive compensation?
The Office of National Statistics has released the latest inflation figures for June, and the good news is that the Consumer Prices Index (CPI) has stayed at 2.0%.
