Written by Jennifer Johnson

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 127271 company byrepparttar 127272 owners as dividends from their shares andrepparttar 127273 amount of dividends drawn is restricted belowrepparttar 127274 40% band rate (i.e. œ31,063 for tax year 2002/03). That way,repparttar 127275 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 127276 higher rate bracket of income tax (i.e. above œ34,515), they will be taxed at 22.5% onrepparttar 127277 excess, which of course will increaserepparttar 127278 tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates.

The most catastrophic scenario is whenrepparttar 127279 director takes his reward fromrepparttar 127280 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 127281 tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is thatrepparttar 127282 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 127283 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 127284 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 127285 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 127286 above, let's take a simple example. We have a limited company and a sole trader. They both make œ60,000 profits each inrepparttar 127287 tax year 2002/03. We assume thatrepparttar 127288 company director takes a salary equal torepparttar 127289 amount of his personal allowances (untaxed income) of œ4,615 andrepparttar 127290 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 127291 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 127292 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 127293 Inland Revenue has tried to reclassifyrepparttar 127294 self-employed. The 1% in NIC hike on staff salaries aboverepparttar 127295 NIC threshold from next April adds to bothrepparttar 127296 employees' and employers' tax burden and may more than offsetrepparttar 127297 saving fromrepparttar 127298 corporation tax zero rate onrepparttar 127299 first œ10,000 of profits.

How to Write a Fundraising Letter

Written by Linda Elizabeth Alexander

This article may be freely published in your ezine, on your website, or in a print newsletter provided that 1.You printrepparttar article in its entirety, unchanged, 2.You include a byline andrepparttar 127270 resource box atrepparttar 127271 end, 3.You notifyrepparttar 127272 author of intent to publish ? please send a courtesy copy of your publication or a link.

How to Write a Fundraising Letter

(c) 2002 By Linda Elizabeth Alexander

The key to a successful fundraising campaign is writing a good letter. This may sound intimidating at first, but fundraising letters contain many ofrepparttar 127273 same elements as any good sales letter.

First, know your donors: Beginning with an updated list of past donors is key -- they will likely give again and may even increase their donations over time. Make sure to have a good, well-targeted, updated mailing list for new prospects as well.

In order to get people to read your letter, they must first openrepparttar 127274 envelope. Include teaser copy onrepparttar 127275 outside ofrepparttar 127276 envelope. This can be as simple as a printed line saying, "We need your help."

Early inrepparttar 127277 letter, make your case -- quickly. Don't beat aroundrepparttar 127278 bush. Tell about your organization or project atrepparttar 127279 top ofrepparttar 127280 letter and get torepparttar 127281 point right away. What problem will this project solve? What need will it fill?

Appeal to your donors' hearts first with descriptions and anecdotes, then their heads with facts and figures.

If you are writing to previous donors, be sure to thank them first before you ask for more money. "Thanks for being such an important influence on our program inrepparttar 127282 past. Last year's fundraiser was such a success, we're inviting you to help again ..."

Also, loserepparttar 127283 hype. Don't exaggerate or over-extend yourself. Nothing will destroy your credibility faster than sounding like a used-car salesperson when raising funds for a good cause.

As with other sales letters, longer copy pulls better in fundraising letters. I know, I know, "Nobody reads long letters." While most people won't read every word,repparttar 127284 more you can tellrepparttar 127285 reader aboutrepparttar 127286 benefits of giving,repparttar 127287 better response you will receive.

Another reason for long copy is with a good fundraising letter, you should be able to start reading at any point inrepparttar 127288 letter and still know what it is about.

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