So, you think you spend your days running your own business or perhaps you imagine you are self-employed?
Sorry to disappoint but when you review what you are actually having to pay the Inland revenue you might realise who you spend most of your time working for.
We estimate that on a daily basis the average reasonably paid executive is handing over 60 -70% of their earnings to HMRC in one way or another. Small business owners are slightly better off.
Let’s put that into perspective if you are working eight hours a day – 9 until 5:00 pm then in effect you are working for Keir Starmer and his chums until about 2:00 pm in the afternoon before you can start paying yourself. If you are in business then the time might shift back a bit to about midday. Even so you are doing a lot of tax collecting free of charge for the government on top of that.
But don’t take our word for it, check it out for yourself and let us know. Here is a checklist of taxes for a rough and ready tax calculator
Tax category |
% rate |
Your amount (£) |
|
Corporation tax |
||
| Small profit rates less than £50K | 19% | |
| Medium profit £50K – £250 K | 26.5% | |
| Over £250K profit | 25% | |
|
Personal income tax |
||
| Personal allowance – up to £12,570 | 0% | |
| Basic rate – £12,571 to £50,270 | 20% | |
| Higher rate – £50,271 to £125,140 | 40% | |
| Additional rate – Over £125,140 | 45% | |
|
NI employee, assuming class A category |
||
| Up to £12,576 pa | 0% | |
| Between £12,576 and £50,268 | 8% | |
| Amounts over £50,268 | 2% | |
| NI employer | 15% | |
| Council Tax | ||
| VAT – Estimate your annual purchases on non-food items and multiply by roughly 16.6% | ||
| Petrol duty – Work out your rough mileage and divide that by the number of miles your car does to the litre. This gives the number of litres you use per year, then multiply this by 52.95 pence per litre. Then of course add VAT at 20% of the price of fuel per litre | 52.95 pence per litre + 20% VAT | |
| Capital Gains tax – Take your actual or potential CGT tax bill and amortize it over the period the asset is held | ||
| Stamp duty – Amortize the last payment made over the years you have owned the property (Exemption for Deputy Prime Ministers) | ||
| Inheritance tax total liability is 40% of everything above the £325,000 threshold. Then divide that by the 40 income generating years to give you an annual figure. (Exemption for Prime Ministers) | ||
|
Total |
What does the total figure come to?
How do you feel about that?
Do you think you are getting value for money from the government? As in do you think your money is being prudently and wisely spent?
Let us know what you think
Your feelings are important here as they act as motivation for carrying on in business.
At the moment there is a record number of businesses closing down. The impression we are getting is that a lot of these closures are due to the owners feeling that the effort, risk and stress is not worth the reward of carrying on.
“The simple and undeniable fact is that our economy will not grow if a large proportion of our entrepreneurs consider that business in Britain is no longer worth the candle. So please fill in a feedback form. Let’s collect some data and see what we can do to persuade the government to change tack.