Coping with Difficult People

Written by Mike Moore

According to a new survey carried out by Alliance & where ID_NUM=9270; Leicester, one in five small business owners view tax as their greatest concern. The Chancellor has announced in his last budget that companies with profits below œ10,000 will not have to pay any corporation tax with effect from 1 April 2002. The question to be asked is: does that announcement make incorporation a more attractive option compared to being a sole trader?

The answer is that from a tax point of view, it is advantageous to trade through a limited company as long asrepparttar income is drawn fromrepparttar 124063 company byrepparttar 124064 owners as dividends from their shares andrepparttar 124065 amount of dividends drawn is restricted belowrepparttar 124066 40% band rate (i.e. œ31,063 for tax year 2002/03). That way,repparttar 124067 owners have no further personal tax ("income tax") to pay. Moreover, dividends are not subject to national insurance contributions. This is excellent news of course. But, if dividend income falls withinrepparttar 124068 higher rate bracket of income tax (i.e. above œ34,515), they will be taxed at 22.5% onrepparttar 124069 excess, which of course will increaserepparttar 124070 tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates.

The most catastrophic scenario is whenrepparttar 124071 director takes his reward fromrepparttar 124072 company as salary. Then his/her salary is taxed at income tax rates (like a sole trader's income). That is because, unlike sole traders,repparttar 124073 tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is thatrepparttar 124074 income taxes are higher than corporation tax rates. On top of that, they will be subject to employee and employer national insurance contributions, which of course increaserepparttar 124075 tax burden and render his position worse than even an unincorporated business ("sole trader"), because NIC Class 1 on payroll are higher than NIC Class 2 paid by self employed.

In contrast, a self employed person ("sole trader") is taxed at income tax rates onrepparttar 124076 profits from his business, which are added to his other sources of income. As it has already been mentioned, income tax rates are overall higher than corporation tax rates. On top of income tax, national insurance contributions class 4 are payable onrepparttar 124077 business profits within a specified band (7% on profits between œ4,615and œ30,420). National insurance contributions Class 2 are also paid by self-employed people, although those are lower than those payable by company directors on their salaries.

To illustraterepparttar 124078 above, let's take a simple example. We have a limited company and a sole trader. They both make œ60,000 profits each inrepparttar 124079 tax year 2002/03. We assume thatrepparttar 124080 company director takes a salary equal torepparttar 124081 amount of his personal allowances (untaxed income) of œ4,615 andrepparttar 124082 balance as dividends. The company will pay corporation tax at 19% equal to œ10,523 and nothing else. The sole trader will pay income tax œ16,542, National insurance Class 2 œ104 and National insurance Class 4 œ1,806. Total œ18,452. The bottom line is thatrepparttar 124083 person that has incorporated his business into a limited company will make a tax saving of œ7,929 compared to a sole trader! Isn't that fantastic?

Somebody might be wondering: why is this entire happening? The official explanation is that, this government, to helprepparttar 124084 economy grow, encourages people to leave as much profits within their businesses to be reinvested, instead of being taken out and spent.

The "unofficial line" is that, as a matter of fact, for yearsrepparttar 124085 Inland Revenue has tried to reclassifyrepparttar 124086 self-employed. The 1% in NIC hike on staff salaries aboverepparttar 124087 NIC threshold from next April adds to bothrepparttar 124088 employees' and employers' tax burden and may more than offsetrepparttar 124089 saving fromrepparttar 124090 corporation tax zero rate onrepparttar 124091 first œ10,000 of profits.

Attitude is Everything

Written by Mike Moore


If we arerepparttar products of our attitudes then it is important for us to examine our attitudes, both positive and negative, to discoverrepparttar 124062 impact they are having on our lives. This is even more important if we are determined to maximizerepparttar 124063 potential that is ours, a potential which, inrepparttar 124064 vast majority of us, remains grossly underdeveloped.

Positive attitudes release a power to achieve that will astound you, while negative attitudes severely hamper our becomingrepparttar 124065 people we are capable of becoming. It becomerepparttar 124066 central task of anyone interested in actualizing their enormous potential to become involved inrepparttar 124067 process of attitudinal transformation.

Attitudinal transformation takes time, effort and determination but it can be done. Don't expect perfection, just progress. It took a long time to develop negative attitudes and it will take time to transform them. It is also important not to concentrate on more than one or two negative attitudes at once. If you overload your agenda for change you runrepparttar 124068 risk of becoming discouraged and giving up.

Once you have identifiedrepparttar 124069 negative attitude you wish to transform, commit yourself torepparttar 124070 process of becoming conscious of that attitude cropping up throughoutrepparttar 124071 day. You will be surprised at how quickly you will become aware of your target attitude. When you are focussed onrepparttar 124072 attitude, visualize it leaving your body and flying off intorepparttar 124073 great beyond. Now replace it with a positive attitude and give yourselfrepparttar 124074 suggestion that from now on this will be your dominant thought pattern. Whenever your old negative attitude creeps back into your mind engage this process of thought replacement. Soonrepparttar 124075 new attitude will become dominant and you will find yourself enjoying its positive power in your life.

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