What Is Ayurvedic Medicine by Swami Sadashiva Tirtha

Higher administration costs to comply with company law,

payroll and bookkeeping is one factor. Another issue is

pension planning. Extracting profits out of the company as

dividends rather than salary means that there will be no

"net relevant earnings" and therefore pension contributions

can't be made. But the advent of stakeholder pension plans

has meant that contributions up to œ3,600 per year can be

made without the need for any earnings. If a person does not

wish to transfer funds in existing plans into stakeholder

because of high charges, there is a way out: the best net

relevant earnings (i.e. salary) in five consecutive years

can be used for making contributions for the next five

years, even if there were no salaries in the remainder four

years. It is comforting to know that entitlement to basic

state pension is not affected by taking a salary from the

company at the level of a person's personal allowances i.e.

œ4,615.

Furthermore, an individual may decide not to bother with

pension plans and instead invest in ISA. Often, these can be

more efficient than pensions but that's beside the scope of

this article. If that option is taken, no salary is

necessary.

Another factor is business motoring. It might be tax

advantageous for an unincorporated business that owns many

cars not to incorporate because if these cars have some

private use there will be benefits in kind taxed on the

users. These are generally higher than the straight

apportionment between private and business for all car

running costs in the case of sole traders.

The conclusion is that there can be considerable tax savings

waiting the sole trader who decides to go down the

road to incorporation. But, one needs to proceed with

caution and careful planning. And don't forget the biggest

advantage of incorporation, which is Protection

from Personal Liability. Incorporating is one of the best

ways to protect a business owner from personal liability.

Shareholders of a company are generally not liable for the

obligations of the company. Creditors of a company may seek

payment from its assets, but not the assets of the

shareholders. This means that business owners may engage in

business without risking their homes or other personal

property.

Thank you for taking the time to read this Article. I hope

you've found it useful. If you have, please drop me an email

and let me know what you think.

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constantinesavva@accamail.com

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on a variety of interesting topics.

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more of your hard earned cash stays with you to expand your

business and increase your profits, we have a Free Special

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LEGAL NOTICE

Whilst every care has been taken in the preparation of this

article, the author cannot accept responsibility for any

errors or omissions. Proper professional advice should be

taken at all times.

We retain copyright for the contents of this article. Any

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BIO:

Swami Tirtha is the author of the Ayurveda Encyclopedia, founder of the School of Ayurveda and Ayurveda Holistic Center. With 26 years of counseling people in Ayurveda, Vedic astrology and spirituality, Swamiji offers whole-life advisement programs on a one-to-one basis. For more information visit his site at http://ayurvedahc.csom. Read chapter 1 of the encyclopedia online.

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