Business Club

 

 

Set up a Limited Company – New Bugdet 2011

Small companies with profits of £300,000 or less a year will pay 20% tax from April 11, down from 21% at present. Employees and the self-employed pay up to 50% if they earn more than £150,000. With National Insurance contributions ( NIC ) the rate rises to 52%.

Take someone who is self-employed and earns £200,000 a year. They would pay tax and NIC of £84,344 from April, leaving take-home pay of £115,656

However, suppose you set yourself up as a company. First you would pay yourself £7,475 salary, equivalent to the new higher personal allowance. You would then pay corporation tax of 20% on the remaining £192,525 left in the business ( £38,505) – leaving £154,020 to be paid as dividends. You could take for example £100,000 as a dividend to leave some profit that can roll up inside the company.

You have already taken £7,475 as tax-free salary, which gives a NIC bill of £55. The remaining £92,525 is a dividend wich is deemed to be taxed at 10%, giving a real dividend of £83,272. The first £31,410 ( 90% of the £34,900 basic rate tax band ) of this is tax-free, because corporation tax has already been paid. The reminder is taxed at 25%, giving a total bill of £12,966. Added to the corporation tax and NIC bills, this comes to £51,526

You are £32,818 better off than if you received a salary of £200,000, but you have left £54,020 profits inside the company, which you take out when the company is sold, minus 10%. This is the lower capital gains tax ( CGT) rate payable by enterpreneurs on the first £5m of lifetime gains. Therefore, the total saving of £27,416. The saving increases if you set up a company with your spouse and use this to divide income between a husband and wife who both own shares in the firm – known as income splitting.

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2484 MISSING PERSONS

In May, June and July 2006 we carried out  a 20 question survey “help us to help you” aiming to find out more about Polish  migrants seeking work and trying to settle in Southampton after 1st of May 2004.  S.O.S Polonia is a need-driven drop- in-centre so it was vital to listen carefully to the alarming S.O.S signals from the new Polish community in order to respond accordingly, immediately and wholeheartedly. The results of the survey left us astounded: out of 2500 respondents only 16 people managed to find jobs in the UK that they were qualified for in Poland (4 drivers, 3 teachers, 3 builders, 2 painters-decorators, 1 chemist, 2 linguists and 1 nurse).

This led us to wonder where the remaining 2484 were?! Those eagles who have landed skilful and eager to work,  but  not confident enough to seek more than “whatever job”.Those who have not plucked up the courage to show employers their diplomas still kept unpacked in their rucksacks.  Of course we know that many migrants hold positions quite different to what they were qualified for in their home country. We understand that when climbing the career ladder in a new country, you often have to start at the bottom rung. We accept that there will be obvious delays on the path to success - the language barrier, cultural differences, understanding a new system and the requirement for recognition of foreign diplomas. Being aware of all this we can’t stop searching for these ‘missing persons’.

There are some hidden treasures within the new communities. There are mines of talent and experience waiting to be discovered. There are great latent resources to be explored (as opposed to exploited).

Thanks to invaluable support from Southampton Enterprise Gateway, Business Link and SEEDA, we are now presenting you with the achievement of the most entrepreneurial of the new Poles of Southampton, migrant workers who dared to take their future into their own hands and started their own businesses. Some of them not only managed to escape the traps of ‘modern slavery’ but they have already created jobs for other people. They are proof that newcomers may mean a blessing rather then a burden to local communities and that our search for missing persons brings a remarkable “return on investment’ and it is worth continuing

Networking opportunity: Would you like to spend a day with us and meet Polish people who live and work in Southampton to hear their stories and to learn more about the dynamics of cultural diversity?