Orange Genie News

Are you on track to reach your retirement goals? When it comes to planning your retirement, it is important not to underestimate how much income you will need per year to maintain a comfortable living standard. A recent report by Prudential shows that those who will be retiring within the next 12 months will be expecting a larger income than those who took their pensions in the last 2 years at £15,800, £500 higher than last year. This optimism comes after a five year period in which people’s retirement plans had been crushed by the market crash. With those retiring before the recession in 2008 expecting to command an average income of £18,700, nearly £3000 higher. 

According to the HRMC “The vast majority of taxpayers pay their fair share of tax, and pay it on time. The latest statistics suggest that 93 per cent of tax due is paid, helping to reduce the deficit and fund the UK’s public services.

However as part of a wider program by the HRMC to collect tax due by finding people who deliberately hide their income and wealth to evade their taxes, HM Revenue & Customs have been given the power to access bank accounts.

From 2015, HMRC investigators will be able to access the bank account of anyone who refuses to pay a tax bill of more than £1,000. Currently, the taxman can seize only the assets of businesses and individuals who ignore payment demands.

The Chancellor expects to recover £290m in the 2015 financial year and £1.23bn the year after by forcing those using registered tax avoidance schemes to pay disputed money to the state.

Many skilled British workers choose the flexibility and freedom of being self-employed, where they take responsibility and control for their own working affairs, including ensuring that the correct tax is paid on their earnings.

This way of working also suits the needs of many organisations which rely on the flexible workforce as and when they need them, without having to make a financial commitment to employ workers on a full time basis.

Over recent years Freelancers and Contractors have grown in numbers and now represent a substantial element of the labour market. Many contractors choose to enter the labour market through their own Personal Service company and as such they are able to structure their rewards in a way that is most suited to their circumstances. Traditionally many contractors choose to withdraw funds through a combination of salary and dividends – this is often a concept not understood by high street lenders and is sometimes cited as a barrier to choosing the contracting route.

A lifestyle decision to enter a contracting career and legitimate tax planning should not detract from a contractors ability to obtain a competitive mortgage. Orange Genie Accountancy work closely with Contractor Financials who specialise in providing mortgage advice to contractors

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