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Tax credit planning

Tax Credit Tax planning ?

I have recently quoted for the accounts for a limited company and the client asked if I did Tax Credit planning.

He said that his current accountant was offering this services on a commission basis.

I was wondering if any one else is offering this services and if it is actually possible.

The only tax credit planning I can think of for a director is

1 keep salary and dividends low

2 Fluctuate directors salary bi annually to take advantage of the income disregard rules.

I remember being on course sometime ago were the speaker pointed out that point 2 would not work as the benefit office can make its own assessment on salary if it suspects  income is being manipulated to maximise tax credits.

Can anyone comment on the above ? Am I missing a planning opportunity for my clients ?

All comments are greatly appreciated.


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29th Mar 2012 12:01

I think you are only missing aggro and lots of unpaid work. Don't touch it

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29th Mar 2012 12:20

Income deprivation/Notional Income

Be very mindful of the following and beyond.

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29th Mar 2012 13:32

Tax Credits

I always look at Tax Credits planning for clients and I totally disagree with the above comment - it's been a massively profitable area for us without any problems whatsoever - last year I got a client back a huge sum of money and he didn't even realise he could claim - to say he has was a happy bunny is an understatement!

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29th Mar 2012 16:36

Agree with jaybee.....I have done some tax credit

work for clients who were not aware they were entitled - the fee ended up being bigger than for the small bit of compliance work I did....I also do the renewals each year - the effective hourly rate far exceeds that of dealing with his tax affairs.


The only issue I have is the complete manipulation of the tax credit system to enable a genuinely healthy/wealthy company/director claim creidts through an artificial manipulation of their income.  It may or may not be technically wrong, but I do personally have a ethical/moral issue with this. 

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29th Mar 2012 16:56

... agree with justsotax...

... totally disagree with manipulation of the figures, which I wouldn't entertain - the fees I've raised have been totally genuine claims where clients haven't realised they could claim - and the fees have been far bigger than anything I could have made through compliance... and, best of all, they have all been plain sailing!

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29th Mar 2012 18:00


These people would have us believe that tax credits planning is very lucrative

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29th Mar 2012 18:28


arnold28 wrote:

These people would have us believe that tax credits planning is very lucrative

... it sure is!

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