Harnett Accontants

Tag: National Insurance

  • Employers Or Personal Pension? You Accountants In West London Have The Answer.

    Tax Insights

    Employers Or Personal Pension? You Accountants In West London Have The Answer.

    While our 7 staff members diligently serve the Small and Medium sized businesses of West London, we ask them to relay our clients’ concerns and questions. One of our accountants in Twickenham recently helped with this question. Is it more efficient for the employer or the employee to contribute to their pension?

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    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    Our accountant in Twickenham responded thus:

    Who should pay contributions into your pension fund: you or your employer? If you control the company you work for, the most tax efficient solution is almost certainly for the company to pay as your employer.

    The company can set a reasonable level of pension contributions against its profits subject to corporation tax (at 20%, 24% or 25%), and it pays no employers’ NI charges on those pension contributions. A ‘reasonable level’ is where the salary plus benefits, including pension contributions, form a commercially reasonable remuneration package for the work done. As long as the total package is set at a commercial level or below, the company can receive tax relief for the remuneration payments.

    If you pay pension contributions as an employee, you need to extract the funds from your company. If you do this by a salary, this creates an income tax charge in your hands. The company receives tax relief on salary payments but it must pay employers’ NICs at 13.8%, with no upper limit. You are also subject to NICs on your salary at 12%, which then reduces to 2% on salary over £42,475 per year. So unlike pension contributions paid directly by the company, salary payments carry NICs of up to 25.8%.

    If you take dividends from the company to pay your pension contributions, there are no NICs payable by you or the company. But the company does not receive tax relief on the payment of dividends. So the only tax relief due on the pension contributions is due at your marginal tax rate, on up to 100% of your earned income, capped by your annual allowance (see below). Dividends are not earned income, so if you only take dividends and no salary or other employment benefits from your company, the tax relief on your pension contributions is limited to £3,600 per year, which is the maximum for a person with no earned income.

    Your annual allowance caps the amount of your pension contributions which attract tax relief. If this allowance is exceeded by pension contributions paid by you or your employer, you will pay a tax charge at your marginal rate. The annual allowance is now £50,000 per year, but this is extended by unused allowances brought forward from the previous three tax years. Thus the exact amount of annual allowance will be different for each individual, depending on his or her pattern of pension contributions.

    What This Means For You

    We can help advise you on this for your own specific circumstances.

    As with our accountants in Twickenham, if you’d like advice on any business matters, we offer free consultation. Just contact our accountant in Richmond

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
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    Need help with corporation tax planning?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • Is Your Business Ready For The New Rti Payroll System? Another Tip From Our Accountants In Twickenham

    Accountancy

    Is Your Business Ready For The New Rti Payroll System? Another Tip From Our Accountants In Twickenham

    As a business owner, you are probably very familiar with the PAYE system, and the annual procedure of sending your PAYE data to the tax man after each tax year. However, there is a new system coming into practice by October 2013, and it’s called RTI.

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    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    RTI stands for Real Time Information, and it will replace PAYE as the way of submitting payroll information for your business. RTI data will be submitted online every time the payroll is run. The data submitted must also be clean, meaning that Employee names, dates of birth, and correct national insurance numbers must all be present. It is very important that this data be completely accurate, and corresponding to the data on the Tax Office computer. If it isn’t, the submission may fail, and your business could receive a fine.

    So make sure that you are ready for the new RTI system. Our dedicated team of accountants can help you manage the transition from PAYE to RTI. For more information, please contact us and we will arrange a one hour no obligation consultation to discuss all of your accounting and financial planning needs. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
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    Need help with payroll management?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • Salaries And Dividends Covered By Harnett Accountants Hammersmith

    Accountancy

    Salaries And Dividends Covered By Harnett Accountants Hammersmith

    If you need advice on salaries and dividends from accountants Hammersmith, then check out this great new video from harnett accountants Hammersmith. If you are paid a dividend by your company instead of a salary, it can help to save on employers national insurance.

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    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    For more great tips to help you cut down on tax bills, and run your business in the most efficient way possible, please contact Harnett accountants Hammersmith. We will arrange a one hour no obligation consultation to discuss all of your accounting and financial planning needs. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with dividend tax planning?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • – Anti Avoidance Bill Brought Foward

    Accountancy

    – Anti Avoidance Bill Brought Foward

    bring you this report from the Accountancy Age website, detailing a new proposal for an anti avoidance bill to be brought before the house of commons.

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    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    “A GENERAL ANTI-AVOIDANCE BILL is to be tabled tomorrow at the House of Commons by Labour MP Michael Meacher.

    Should the bill be passed, it will be the first time an anti-tax avoidance principle has been enshrined in UK law.

    Unlike the general anti-abuse rule (GAAR) – the consultation for which closes tomorrow (14 September) – the bill addresses national insurance and VAT. It also looks to address shifting income from one tax to another in order to reduce a tax liability and any arrangement resulting in tax paid late.”

    If the bill is passed successfully, it will supersede the current situation brought about through years of case law, which finds that schemes to avoid paying taxes aren’t actually illegal. However, critics say that the newly proposed rules will be so weak and ineffective that they will have no measurable economic impact at all.

    If you need advice about how to reduce your tax bills, or how to make sure that you are paying the correct amount of tax, please contact Harnett Accountants Wimbledon, and we will arrange a free, one hour, no obligation consultation. You can contact us through our website or on 020 8977 3883. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
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    Need help with VAT returns and compliance?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • – Taxman Still Fighting On Ir35

    Accountancy

    – Taxman Still Fighting On Ir35

    Last week, our Accountants in Wimbledon had some great advice about IR35, and now brings you this report on IR35 from the Accountancy Age website:

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    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    “IR35 has not been the taxman’s favourite subject in recent times.

    It has been the source of various controversies; not least the 2,000 senior public office holders engaged off-payroll, potentially affording them lower tax bills.

    The IR35 legislation is designed to make sure tax and national insurance are not avoided by would-be employees working as freelancers.”

    The taxman has already brought in fives times the amount in IR35 cases in 2011 as it did in the previous year, and this is expected to rise even further from now as specialist teams have been put in place to investigate IR35 cases. This comes as it was revealed that over 2000 highly paid public officials were being paid “off payroll,” and the BBC has been employing over 25,000 members of staff in this way, 3000 of whom run their own private companies.

    If you need advice about IR35, please call our accountants in Kingston on 020 8977 3883 or contact us through our website. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with VAT returns and compliance?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.