Tenon’s poll of more than 300 entrepreneurs also found that many more may follow in an attempt to escape the punishing 50 per cent rate of income tax – nearly half (48 per cent) are still deciding what action to take. Of the initiatives the government has introduced since the financial crisis, only 37 per cent of SMEs have felt any benefit. In the past month, high-profile names such as Sir Michael Caine and Tracey Emin have threatened to change their tax residency to countries with more favourable tax rates. Popular locations for redomiciling include Monte Carlo, Guernsey, Liechtenstein and the Cayman Islands. “Entrepreneurs are letting their feet do the talking – they are unhappy with the government’s new taxing structure and making it plain for everyone to see. It is their way of showing this rise in income tax will be self-defeating,” comments Andy Raynor, chief executive of Tenon Group. To minimise your tax burden, make sure you: * Use all of your tax-free allowances with cash and/or stock and shares with Individual Savings Accounts (ISAs). * Make full use of the annual CGT exemption by selling assets and crystallising any gains. * Introduce a share scheme which could, if structured properly, avoid all income tax and NI liabilities. * Dispose of any assets before 6 April 2010 to take advantage of the current relatively low rate of CGT (18 per cent). * Consider a pay advance – salaried bonuses given before 5 April 2010 will be taxed at 40 per cent.
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