The Business Exchange Swindon & Wiltshire May Edition | Page 8

FINANCE Tax relief on pensions explained by TBE experts AMS Accountancy Pensions have been in the news a lot recently. In the budget, the Chancellor announced there will be more flexibility in what you can do with your pension funds. This new flexibility means that pensions will be more attractive as investments to many people. Here are some things to be aware of: Are you missing out on Higher Rate Tax relief on your Pensions Contributions? Employees earning over £41,865 (the Higher Rate Tax threshold), often think they will automatically obtain tax relief on their contributions when they pay into a pension scheme. But, to get higher rate tax relief (an extra 20%) you need to complete a Self-Assessment tax return to claim the relief - otherwise you will be paying more tax than you should be. Do you actually know how much you contribute into pensions? If you are in a large organisation you will likely have a pension scheme. Do you know if it is you or your employer or both who makes the contributions? You may need to check this out and, if necessary, complete a tax return to avoid missing out on your tax relief. Deferring state pension to receive a lump sum If you reach state pension age before April 2016, you can defer your state pension and receive a lump sum at a later date. When you take this lump sum, it will be taxed at the ‘marginal rate’ for that tax year: 0% if you don’t earn enough to pay tax; 20% for income between £10,000 and £41,865, or; 40% (Higher Rate Tax) for income above that. So, if you plan to withdraw your lump sum in a tax year when your total income is below the Higher Rate threshold, it can save you 20% tax on the lump sum. Ask AMS Advice for small businesses Q: As a Director of my own Company. I’ve paid myself the ‘minimum wage’ and National Insurance, can I claim Statutory Maternity Benefits? You probably can. In order to qualify for Statutory Maternity Pay you must have been continuously employed by the same employer (in this case your Company) in the 26 weeks going into the qualifying week of your maternity, (around 14 weeks before the due date). You must also ensure your salary is above the Lower Earnings Limit for National Insurance of £5,772 (tax year 2014/15). What you would be paid. Assuming you qualify, your Company would pay you, via the normal Company payroll system, 90% of your average weekly salary for 6 weeks; followed by £138.18 for 33 weeks (Your Company can reclaim this from HMRC). If you don’t meet the above criteria, you may still be able to claim Maternity Allowance – for 39 weeks, up to £138.18/week. Peter Bromiley ACA , AMS Accountancy Ltd., Swindon SN5 7XF 01793-818400 [email protected] www.ams-accountancy.co.uk 8 THE BUSINESS EXCHANGE 2013 RENEWABLE ENERGY SECTOR GROWTH LEADS TO A WATERSHED MOMENT Judging by the amount of jobs on offer in the renewable energy sector, in the Swindon area alone, I would say this industry is exploding. The recent (and very overdue) launch of the Renewable Heat Incentive on 9th April, compounded by the Competition and Markets Authority (CMA) enquiry into the Big 6 energy firms ever-increasing prices, has opened the door wide for new renewable energy businesses – it’s money for the taking - as thousands of homes are choosing to make the switch and dramatically reduce their energy bills. But, what if you were one of the pioneers in this industry and find that your business has plateaued due to increased competition? What are the options open to you? Well, there are quite a few actually. You could opt for a Merger or Acquisition of a new, aggressive start up that is winning leads through marketing excellence, but hasn’t got the experience and knowledge to convert the business, or, you may consider early retirement and sell your business, taking advantage of this peak in the sector’s life cycle to maximise your return. Here at Watersheds, we concentrate solely on helping our clients to make money, by buying and selling shares in private companies, and, raising finance to grow their businesses. As a Swindon based company ourselves, we thrive on supporting other local business with these life-changing events, as the opportunity to grow your business, or realise a significant sum when selling, is a true ‘Watershed’. We are happy to spend an initial hour or two, talking your thoughts and ideas through with you, at no cost. Watersheds work on a success fee basis, because we believe in being paid when we deliver results, and so get paid only when a deal completes. By working in this way, we have found that this leads to a partnership approach with our clients and encourages a results-orientated culture. We would like to help you achieve your Watershed moment, and welcome your call to set up an initial discussion. Please call Sue Green on: 01793 719788 or email her: [email protected] Editorial writtem by Sue Green - Watersheds