IF you run your own company and your spouse gets an income from it, then you are now at risk. That flows from an Inland Revenue victory in a major court case recently.
The classic scenario is that the husband runs a company and his spouse is a 50 per cent shareholder, but has little or no input in the running of the business. The spouse receives dividend income, thereby using her basic rate band and avoiding 40 per cent tax.
The Inland Revenue's victory in a case against Arctic Systems means that the dividend income allocated to the spouse is now taxable on the husband - at 40 per cent!
What effect may this have? If both spouses receive £30,000 in dividend income, the husband could be liable to £7,500 in additional tax, so contact your adviser if your company is set up this way.
Over the last eight months I have advised on how a business plan should be put together. Now is the hard part - action. Without action your business will not change, it will not improve. You will get tomorrow what you did today.
Even more important than the business plan - in fact the cornerstone of any business - is your decision about what your core values are. What do you really believe in above all else?
The business plan may change as time goes by, as new technology is introduced, as your business grows, as the market you are in changes - but your core beliefs will not.
For example, the core belief of Merck, an American pharmaceutical company, is to make products that save lives. It does not concern its own people, or the shareholders or even making a profit. Merck exists to save lives. It sounds just an ideal but Merck actually believes in it and follows it.
After the Second World War, Merck supplied a drug to Japan that saved thousands upon thousands of lives. Japan could not afford to pay for the drug, so Merck funded it all themselves. It received nothing at the time, however it is now the biggest pharmaceutical company in Japan - so perhaps it has been rewarded.
The organisation followed its core values. I believe that if you do this, and everyone in your organisation does, then your business will succeed.
Finally this month my quote comes from Confucius - "A journey of a thousand miles begins with but a single step." Take that step!
For more information contact Mark Grewer at Hunter Gee Holroyd, Club Chambers, Museum Street York YO1 7DN
or phone 01904 655202
Updated: 09:34 Tuesday, November 23, 2004
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