FONTS: HOW TO CHOOSE BETWEEN THEMWritten by Tim North
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 10,000 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 as income is drawn from company by owners as dividends from their shares and amount of dividends drawn is restricted below 40% band rate (i.e. 31,063 for tax year 2002/03). That way, 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 within higher rate bracket of income tax (i.e. above 34,515), they will be taxed at 22.5% on excess, which of course will increase tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates. The most catastrophic scenario is when director takes his reward from 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, tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is that 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 increase 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 on 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 on business profits within a specified band (7% on profits between 4,615and 30,420). 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 illustrate above, let's take a simple example. We have a limited company and a sole trader. They both make 60,000 profits each in tax year 2002/03. We assume that company director takes a salary equal to amount of his personal allowances (untaxed income) of 4,615 and balance as dividends. The company will pay corporation tax at 19% equal to 10,523 and nothing else. The sole trader will pay income tax 16,542, National insurance Class 2 104 and National insurance Class 4 1,806. Total 18,452. The bottom line is that person that has incorporated his business into a limited company will make a tax saving of 7,929 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 help 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 years Inland Revenue has tried to reclassify self-employed. The 1% in NIC hike on staff salaries above NIC threshold from next April adds to both employees' and employers' tax burden and may more than offset saving from corporation tax zero rate on first 10,000 of profits.
| | Congratulations! You've Gotten the Visitors to your Site - Now, can they find what they're looking for?Written by Robin Nobles
As search engine marketers, we spend an enormous amount of time trying to get targeted traffic to our site. But, once those visitors get to our site, can they find what they're looking for? If not, guess what? We've lost a customer.Think about it this way. How many times have you found a site through a major search engine or directory, only to visit site and not be able to find what you're looking for anywhere on site? What do you do next? You go back to search engine and click on next site. That site has lost a customer: you. Helping your visitors find what they're looking for on your site can cover a great many areas, such as navigation, user interface issues, and lack of a clear "call to action." But one way around many of those issues is to offer an onsite search engine, so that once visitors hit your site, they can easily find exactly what they're looking for. The really neat thing about onsite search engines is that many of them are FREE. Yes, you read right: free. Of course, that also means that you may have ads in your search results, which may or may not present problems for you. However, even if you choose to purchase an onsite engine, cost is generally not expensive. What should you look for in an onsite search engine? * Good customer support. If you begin to have problems with engine, you want to be able to get help in fixing it. * Reports that let you know what people are searching for once they reach your site. Just think of GOLD this will tell you! If you don't have a page that covers a particular topic, make one! * Ease in setting up engine. This may or may not be an issue to you, but if you're like me, you want something that is simple to set up and maintain. * An extensive "help" section at site that will walk you through setting up engine and answer any questions you might have. * The ability to keep engine out of certain areas of your site that you don't want spidered and available through search, such as employee areas, password-protected member areas, etc. * The ability to spider password-protected areas so that your member areas can have their own onsite search. * The ability to customize search results pages. * The capability to request re-indexing whenever you update site, or even to schedule re-indexing on a regular basis. In my training material and resource library at Academy, I had an onsite search engine for a long time. Then, company folded. Until recently, I hadn't set up another onsite engine, because one onsite engine that I really wanted to use didn't index password-protected areas. So, I "patiently" waited for onsite engine, FreeFind, to add this to their list of features. When they recently did, I jumped on it, and now both of my online training programs have excellent onsite search engines through FreeFind (http://www.freefind.com).
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