Zooconomics Saving A Client over £20,000
An IT contactor contacted us in 2016 in relation to his own payment from his freelance business. He was struggling to see why he was being asked to pay so much towards his National Insurance and tax returns and wanted to see if he had done anything wrong.
After a brief look at the client’s finances we were able to find the problem. Despite working for himself, he had put his own payment information through PAYE. Because this client took £70,000+ in salary and dividends, this meant he would’ve had to pay just over £30,000 through PAYE; not an ideal situation.
By combining his salary and dividends, and figuring out which was the most effective way to manage this client’s accounts, we were able to knock off a sizable amount of their tax return.
If they had gone through the standard PAYE scheme, they would’ve had to pay just over £30,000, but through our accountants they instead paid just shy of £7,000.
I know which option I would rather pick.