Dec
06
2022

Like It or Not, Legal Tax Avoidance Is Here to Stay

Tax has historically always been a controversial subject. Who pays taxes and how much they pay often being a sore or sensitive point. And when you hear about tax avoidance, it can immediately provoke a hostile reaction, with people immediately, and often erroneously, assuming some law has been broken.

That tends to be the common reaction, and in the UK, a number of high profile figures have been pilloried in the press for their tax avoidance. But under scrutiny, most such individuals may be the recipients of moral outrage but rarely legal retribution.

The reason being is that they are taking advantage of perfectly legal tax avoidance schemes. One of the most common schemes utilised by high earning individuals revolves around remuneration trusts. In the UK, they represent perfectly legal tax mitigation schemes.

They operate by allowing an individual or company to use an offshore company to invoice for their services rather than paying them directly, which, unsurprisingly, provides a whole host of tax benefits. The offshore company can then, without breaking any UK tax law, transfer these funds to a UK company to invest on its behalf. Because the money is held on trust for the offshore company, there is no tax payable on the UK company’s investment or the profits it then accrues from the investment. Additionally, the offshore company can pay loans to private individuals who receive these loans tax free.

Naturally, remuneration trusts prove one of the more robust and legal tax avoidance strategies, but they are only accessible to high earners, usually companies, shareholders and individuals earning in excess of £100.p.a. Such schemes have been accepted by HMRC in the UK since 1994, and have been scrutinised by legal opinion too. As such, they remain perfectly legal, and serve as an important distinction when talking about tax avoidance.

Anyone who evades taxes they should be paying is subject to the rule of law, and can be rightly persecuted. However, when an individual undertakes perfectly legal tax planning strategies, the question is one of morality rather than legality. And, whether an individual should be allowed to legally avoid taxes by such strategies is also a political question.

Currently in the UK, there are numerous tax mitigation schemes which can legally help high earners, but changes in government could in the future render such strategies illegal based on a view that high earners should not be able to avail themselves of tax planning strategies unavailable to all.

But, for now, they are accessible to high earners and it pays dividends when hearing about high profile individuals engaged in tax avoidance to read between the lines and ascertain whether they are engaged in illegal activities or merely taking advantage of the numerous legal tax schemes such as remuneration trusts which provide them with substantial tax benefits on their earned income.

Nov
04
2022

How Getting Car Loans After Bankruptcy Is A Real Possibility

Declaring bankruptcy is traditionally seen as the surest way to convince lenders to steer clear. But the idea that it ends any hopes of securing a future loan is not quite right, and even before the usual 2-year term of the bankruptcy ends, there are options. Getting a car loan after bankruptcy, for example, is not that difficult.

As with all financial matters, there are conditions and criteria to satisfy before approval can be granted, but the fact remains that an opportunity to buy a new car is available to bankruptees. But what is needed in order to secure loan approval despite bankruptcy?

Well, the lenders are obviously accepting a higher degree of risk than usual, so there are some special conditions involved, as well as higher interest rates. But the car loan can be secured as long as the affordability factor is proven and a means of repaying the loan is assured.

Proving Affordability

Whenever someone applies for a loan, the lender is always more interested in establishing that the repayments are affordable to them than what their credit history is like. There are 2 parts to establishing affordability: the income and the debt-to-income ratio of the applicant. Getting a car loan after bankruptcy depends to these matters too.

Income relates to employment, and applicants must have a full-time job before they will be considered for approval despite bankruptcy. The income itself needs to be sufficient too, but the employment stability is perhaps more important. So, recently hired people (within 3 months) are likely to be overlooked.

The debt-to-income ratio relates to excess income, or the existing monthly expenditure compared to the monthly income. The ratio stipulates a maximum 40% of income be spent on debt repayment, so the car loan repayments must fall within a tight limit. If it does not, then the application will be rejected.

Finding The Best Deal

Admittedly, not every lender is willing to grant loans to recent bankruptees, and many of those that do fail to offer affordable terms charge interest rates that are very high, or have loan limits that are very low. However, online lenders tend to cater to the niche, and chiefly offer affordable car loans after bankruptcy.

Of course, we can rule out securing a new Porsche, as the scope of any such loan has to be confined to what is not going to cause major financial pressure. But it is not unreasonable to expect to get approval, despite bankruptcy, on a loan of $20,000, if the repayments are within budget.

But while online lenders may offer attractive deals, be sure to read the small print in any car loan contract before signing it. And check out the reputation of the lender on either the BBB website or through the Verify1st security tool.

Helping To Get Approved

Getting a car loan after bankruptcy is an opportunity to rebuild your credit reputation, so there can be a certain amount of pressure to secure approval. There are a few things to do, to help that cause.

The most practical is to include a cosigner in the application – someone who is willing to act as guarantor for the loan. The lender will be happy with the extra security on the loan, and will lower the interest rate. However, they will only accept the nominated cosigner if he has an excellent credit history and a large income.

Another way to help secure loan approval despite bankruptcy is to offer a down payment on the car. This effectively means that the size of the car loan is reduced. A 20% down payment on a $15,000 car would lower the required loan to $12,000.

Oct
05
2022

Tips To Help You Become A Better Online Business Person

Starting and maintaining a home business enterprise is a bold move. Home businesses can be immensely successful if you know how to maintain your businesses affairs in the right way. This article will cover some of the essentials you need to consider, to ensure the growth, success and profitability of your online business.

If you have a home based business, don’t miss out on the home office tax credit. You can claim this space even if you don’t devote an entire room to your business. If you have an area which is only or primarily used for business purposes, you can claim it based on square footage, and calculate the portion of your home that is taken up by your office space.

Once you’ve decided on a product to sell, do your homework and check out your competition. Look at their prices and study the quality of the goods that they are selling. Make sure not to price yourself out of the market, and figure out how to deliver the best value to your customers.

Set up a Post Office box for all your business mail. It’s best to do this, rather than put your family at risk by using your physical address. This is especially important if you are doing most of your business online. Don’t ever post your home address online, for any reason.

To reduce distractions keep your office off limits to children. Have set work hours that enable you to run your business and still have time for your family. Older children should understand not to disturb you while you are working. For your business to succeed your family needs to be supportive and respectful of your work schedule.

Take all of the home-business tax deductions that are legally allowed. For example, you can deduct the cost of a second telephone line or a mobile phone if you use it exclusively for your business, but be sure to keep sufficient records to prove your deductions. Taking all permissible write-offs helps you keep more of what you earn.

Although you may be used to working eight hours a day and then being off, you have to realize that in order for a home business to thrive more of a time commitment may be needed. Once everything is in place you will be able to relax a little.

Maintain a professional attitude as you begin your home based business. Keep your personal life and your professional life separate. Just because you are working from home, does not mean that you should engage in any family responsibilities during the time that you are supposed to be working. You will not be successful if you do not put the time into running your business efficiently.

Don’t walk into a home business enterprise blind! There are many online discussion forums designed for small business owners to discuss the unique obstacles in this field. Look locally for other small business and home business organizations that meet in person. Either way you go, networking with other business owners gives you an excellent support system.

Having a business license for your home business often allows you to purchase things wholesale. This is excellent news for people who make their product, since you can search on product search engines for bulk orders of raw materials. This minimizes trips to the store, and frees up your wallet for other expenditures.

In the end, for most, having a online business allows for a level of control and creativity that the mainstream approach lacks. However, after reading this article, you may realize that you cannot necessarily go about maintaining a successful home business in the same way that you would maintain a traditional business. By utilizing these tips and advice, you will set your business up for a lucrative and stable future.

Sep
04
2022

Can A Debt Consolidation Loan Restore Order To Your Personal Finances?

A debt consolidation loan is one that takes your existing credit balances and rolls them into a new loan. Usually, the payment on the debt consolidation loan is considerably less than the total of all the individual payments you have been making. These can sometimes be a good way to regain control of your personal finances, but there are some points you should consider first.

Before you take out a debt consolidation loan, see if there is another way to handle your personal finances. Can you reduce expenses and make larger payments on existing debt? Could you and/or your spouse take a second job for the express purpose of paying down debt and restoring order to your personal finances? Are there other ways to raise cash, such as the sale of a boat that hasn’t been in the water for years or a vacation cabin you never use?

You also need to know how much the monthly payment on your debt consolidation loan will be. While it is normally less than your total payments, if it is still out of reach of your personal finance picture, you are not doing yourself any favors by taking one.

If your personal finances can be restored, and debt eliminated, in a relatively short period, you might want to stay with the debts you have. For example, if your financial problems are due to paying for a child’s last year of college, you can probably survive without incurring a debt that may have a longer repayment term than you currently have.

You will also have to exercise control over your personal finances if you take a debt consolidation loan. Old habits will have to be changed, or you can quickly wind up in even worse circumstances than you started with. One example is when people take out a debt consolidation loan, pay off their credit cards, and then run their balances up again. Now they not only have the same payments they couldn’t afford in the first place, they also have a payment on the debt consolidation loan to deal with. If a problem with your personal finances has been chronic, no matter what you did, you need to be sure that you are willing and able to change your spending habits before you take out a debt consolidation loan. Otherwise, your personal finances will continue to be a shambles and your debt load will keep increasing until there are no options left except bankruptcy.

If you take out a debt consolidation loan, it is a good idea to close as many accounts as you can. Keep one bank card for emergency use only, and close the others. Expect to be deluged by enticing offers from the department stores, who want you to reverse your decision and keep the account open. They may offer you huge discounts on your next purchase if made with their card or several months of no payments and no interest. Stay strong, and follow through on your commitment to regain control of your personal finances.

A debt consolidation loan is not for everyone, or a solution for every situation. But for many people, it is the best way to restore some sense of order to their personal finances. It can also bring peace of mind to others, and that is something that cannot be bought.