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Here is an unmissable tax concession for any business owner with children aged 13 or more in full time education.

Every UK citizen has personal allowances against every form of tax but there is a special concession for salary paid to any employee in full time education.  Provided the salary is only paid in term time and you have the written permission of the local authority for your child to work you can pay them up to £15,480 per year without any income tax or national insurance. There are simple rules to follow and the legitimacy of this measure is reinforced by the Government itself as you can see from this link.

Incredible, isn't it. With private school fees running at £10,000 or more per year for day pupils this means you can slash the cost to you as an individual of private education. Of course, this benefit is equally valuable as a means of meeting maintenance payments if your previous relationship has come to an end.      
   
You may find it better to open a bank or building society account for each of your children but with you as the only signatory and then the salary can be paid into there before being paid out again under your control. The again you might want to use this as an opportunity to increase the wealth that you cascade down to your children (or grandchildren/neices/nephews and so on) to avoid inheritance tax because these payments do not count towards your annual gift allowance.

Quite apart from the obvious benefit of avoiding income tax and national insurance it also means your family gets more benefit out of both the pension and capital gains tax regimes because your personal taxable income will have been reduced by the amount of salary paid to your children. In some cases this can give you 275% tax relief on profits that you take out of capital investment bonds (by escaping the dreaded 'top slicing' regime) and 61% tax relief on pension contributions if your taxable income would have exceeded £100,000 unless you took advantage of this opportunity.  

The tax regime is imposed upon us by our elected government and we are free to organise our affairs in any reasonable way that we wish provided there is no attempt at tax evasion. All of the nasty bits will be appllied to us faithfully by HMR&C and so you should take advantage of the good bits too. 


What an interesting year 2009 turned out to be. Having hit a low point in October 2008 global stockmarkets made a valiant attempt at a revival only to hit rock bottom on 5th March 2009. Since then most funds are up by more than 20% with emerging markets up by as much as 75%.

For what seems like years you have heard from us the mantra that "no-where else in the world is in better financial shape than the UK, so keep your investments here". Well that is no longer 100% true. China is in better financial shape, largely because they are sitting on most of the cash reserves for the world, but loyalty to the UK has been handsomely rewarded this year. As a Sterling investor the FTSE All Share index rose by 24.7% between 1st January and 30th November. If you had followed the FTSE Eurofirst 300 the rise was just 16.7% and the S&P 500 in America delivered a pitiful 8.7%. Towards the end of 2010 or early in 2011 international currencies are expected to return to their more customary trading relationships - political ineptitude permitting - and that will mark the moment to change from the current advice which is to stick largely to the UK.

As the end of the decade is upon us we can reflect upon how it has been for us all. Ten years ago it was common to find investors sticking pins into a newspaper to gamble on another dot.com stock or simply making arrangements to see whether the millenium bug will have given them January off. The FTSE 100 was on the cusp of 7,000 and the yield on Undated War Loan Gilts was 4.9%. Since then our government has made more progress with inflation and so the yield has eased back to 4.5%. What this means is that investments with no risk at all earned 4.5% per year before tax during the Noughties.

There is nothing to suggest any substantial change in this economic outlook for the coming Teenies and so a well diversified, multi-asset portfolio should be expected to deliver 7% per annum on average. This gives not only the risk-free return but also some compensation for the volatility or risk that you are taking.

Now if all this came to pass you would double your money by 2020 and it will have grown in its purchasing power but, as Chris Tarrant might have said, you don't want that! Human impatience and passion have an adverse effect upon investment decisions and some of you will want to double your money by next Christmas or even the end of the tax-year. Whatever you want the guidance is clear. Talk and listen to Corrigans. Understand the chances of failure and success as well as the real cost or benefit and think about it. Only proceed when you are comfortable and then keep talking and listening to Corrigans.      

The story about the Pensions Act 2008 is that it has changed its name for a third time, now known as the National Employment Savings Trust or NEST for short. There is an update on the latest news in 'Frank Talking' which can be found under the 'about us' tab above .  

On the insurance side there is one topic that you might have missed but needs your attention. 

Quinn have had their permission to take on new business withdrawn and they cannot renew any policies after 5th April 2010. This insurer has been one of a number that has consistently driven down prices for business and personal insurances and so they became very popular with policyholders. Seasoned campaigners like Corrigans refused to deal with them though because the price was uneconomic, the cover provided by their policies was felt to be inadequate and their claims service unacceptable. In the 1970's there was a spate of similar crashes and policyholders found themselves without any cover and also had to pay their premiums all over again. Quinn have not ceased trading but the warning signs are there for those who want to see. PLEASE CONTACT CORRIGANS IF YOU (OR SOMEONE YOU KNOW) HAVE ANY INSURANCE WITH QUINN so that contingency plans can be made in case things do go from bad to worse.