Macario Lewin's Blog

Photos from our mince pies & mulled wine day

Thank you to everyone who joined us for some Christmas spirit in our Swansea office on 18 December.

We hope you enjoyed yourselves as much as we did.

Happy New Year to you all x

   

Tax doesn't have to be taxing, but it is

Martin Macario contemplates the forthcoming 60% effective rate of income tax 

It is well publicised that a new 50% additional rate of income tax becomes effective from 6 April 2010.  Most of us however can breathe a sigh of relief as this additional rate is only applicable to individuals who have taxable earnings in excess of £150,000 in the 2010/11 fiscal year.

What is less well known is that that the personal allowance i.e. the amount an individual can earn before having to pay tax, which is currently £6,475, is going to be reduced by £1 for every £2 of earnings that an individual receives that is in excess of £100,000.  For example, an individual who earns say £105,000 in 2010/11 will see his personal allowance reduced by £2,500.  The result of this restriction is that the taxpayer in question actually pays an effective tax rate of 60% on the £5,000 of earnings that exceed £100,000.  This 60% rate applies for the range £100,001 to £112,950.  The effective rate then reverts back to 40% up to £150,000.  

This is an alarming statistic and as an aside, quite how employers are going to implement this through the Pay As You Earn (PAYE) system, if appropriate, is likely to be a real challenge.  It does seem a strange piece of legislation and certainly does not fit with ‘tax-simplification’.  

Nevertheless, the key point here is that whilst there may not be too many individuals in the UK who earn more than £150,000 there are a considerable number of taxpayers that do achieve annual earnings of more than £100,000. 

Fortunately, the restrictions on pension contributions are only applicable to individuals earning more than £150,000, assuming other conditions are met.  Therefore, for individuals who fall into the 60% category it is possible, assuming they have taken independent financial advice, to reduce taxable earnings to below £100,000 by way of pension contributions, and thus save tax at 60%.

National Insurance contributions are also increasing and all self-employed business owners should once again carefully consider the pros and cons of incorporating their business now the pendulum is once again swinging in favour of incorporated entities.    

Let us spill the beans...

There's only one thing we like more than receiving foodie treats here at Macario Lewin and that's giving them away.

OK, that's not true but before they get eaten we're giving away 100 noodle boxes (less a few that have mysteriously disappeared) of Jelly Belly beans.  

We'll be hand delivering the gifts to our neighbours in Swansea and Chepstow early next week.  

If you spot us, say hello, collect a box and please watch out for the liquorice ones.

www.macariolewin.com

Should I Stay or Should I Go?

The UK is becoming an increasingly expensive place to live and work.  With changes such as:

• ·       A new 50% rate of income tax becoming effective from 6 April 2010
• ·       Restrictions to both the personal allowance and pension relief
• ·       Increases in taxation of company cars
• ·       The new UK tax rules on residence and domicile
• ·       Implementation of the new Companies Act

As a result of these changes many high net worth individuals and companies are leaving the UK.  One of the most high profile companies being McDonald’s who, after 25 years in the UK, have relocated their European headquarters to Switzerland. 

So what does that mean to the rest of us who are left behind?  Well, like any business in this economic downturn, the Government has two options; they must reduce spending and raise revenues.  This September they announced a review of public spending with a view to cutting costs.  To raise revenues, initiatives have been implemented to ensure that no stone is left unturned in collecting tax.

As a result, as is so often the case, it’s the small businesses and hardworking employees that are the focus of their attention.  In particular HM Revenue & Customs (HMRC) have issued a document entitled “False Self Employment” which serves to further challenge the status of the self-employed person in the construction industry.  The objective being to reclassify more individuals as employees and thus making them ineligible to claim the usual business expenses and create an additional national insurance liability for the deemed employer.      

HMRC have also revisited their voluntary disclosure scheme for UK residents that may have undeclared overseas bank accounts.  The new scheme is called the New Disclosure Opportunity and taxpayers have until 30 November 2009 to notify HMRC that they wish to make a voluntary disclosure.  The banks have already provided HMRC with details of individuals with overseas accounts.   So, if you have an overseas account that has not been disclosed, it is important that you call HMRC before they call you!

Finally, changes to HMRC powers and a new penalty regime make it essential that taxpayers review their affairs on a regular basis, consider any tax saving opportunities and are compliant with all aspects of business and personal tax.

Martin Macario

You can contact Macario Lewin by:

info@macariolewin.com

Swansea 01792 473992

Chepstow 01291 621588

We have award winning branding!

When we started Macario Lewin in 2006 we knew we weren't stereotypical accountants and we needed our branding to match. 

Two extremely busy years later we enlisted the help of design consultancy Staziker Jones (follow the link for images of our stationery and the award).  After taking us through a few brainstorming workshops, Staziker Jones came up with a cool, confident, professional brand that was built around the idea that we are certainly not your average bean counters.  

We were delighted that Staziker Jones totally understood us and we immediately fell in love with their design.  Our existing clients were very enthusiastic about the change and the new branding attracted many new clients.  

It appears that the judges at the Cardiff Design Festival loved it too as, on Monday, night Staziker Jones won the award for best branding.  

Well done Staziker Jones, Macario Lewin are so proud to be a part of your success.  

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