Chapter 1: The Benefits of a Business Structure

Recently, I had a conversation with an individual who mentioned he earned an additional £15,000 from a side business he was running in the evenings.

While he was thrilled about the extra income boosting his bank balance, he was less enthusiastic about the substantial tax cut he would have to face. The main issue stemmed from letting those profits accumulate in his account without investing in business-related purchases, which led to a hefty tax obligation.

Understanding the core advantage of a business is crucial. It allows you to acquire items for operational use, significantly decreasing your taxable income while safeguarding your assets.

I recall watching a TV segment featuring debt collectors and bailiffs. In one instance, a team attempted to seize possessions from an individual who had fallen behind on payments for a vehicle. The catch was that many of the items they sought to confiscate weren't his personal belongings; they had been acquired through his company.

Though he faced financial difficulties and was in debt, the company he managed was still thriving, thanks to equipment and furniture purchased under the business name. He had meticulously kept receipts, which protected those assets from being seized by the bailiffs.

It's important to clarify that while utilizing a business for personal purchases can be beneficial, there’s a limit to what an accountant can conceal before drawing attention from tax authorities. However, maximizing the use of business funds for growth and purchases is highly advisable.

For instance, if you rely on a laptop and mobile phone for your online ventures, consider acquiring them through your business. This not only lowers your taxable income since these purchases are classified as expenses, but it also means the company owns those items for your use.

Starting a business can be an excellent way to generate income while affording “luxuries” you might not typically purchase. For example, a writer I know was struggling financially but found his business account flourishing, enabling him to buy a new laptop necessary for his work.

Typically, employees must buy gadgets like laptops and phones using their post-tax income, while business owners can acquire such items directly from their profits, effectively reducing their tax liability.

A few years back, I remember a politician who held a significant position yet was humorously noted for his family business operating at a loss for years. In reality, that might have been a smart strategy; the business’s “losses” were likely reinvested in new tools and resources, minimizing the tax bill while still supporting the family.

The intent of this discussion is to illustrate that having your own business can yield multiple advantages. A business that doesn’t generate substantial profits is not inherently negative; it can be a strategic benefit.

For example, imagine launching an online venture selling information products like eBooks and courses, generating about £1,000 monthly. Instead of hoarding those earnings and facing a tax bill, consider reinvesting every penny to enhance your website traffic, expand your email list, and develop additional products.

By doing so, you might find yourself spending £12,000 to earn £12,000 in your first couple of years, effectively avoiding any tax obligations. What you’re doing is using other people's money to lay the groundwork for a more profitable future.

Eventually, you’ll scale up your business, leading to increased sales and revenue. Yes, taxes will eventually catch up with your profits, but while you’re reinvesting in growth and equipment, you can enjoy significant benefits without the tax burden.

Reducing your tax bill involves navigating various strategies, knowing what to purchase, and timing your investments wisely. It's akin to hiding money in plain sight, though it can be labor-intensive.

However, there’s a simpler approach.

Chapter 2: Exploring Tax-Free Income Opportunities

Utilizing systems that allow for tax-free earnings is one way to simplify the process. For instance, gambling in the UK is tax-free, primarily because most gamblers lose more than they win.

Yet, there are individuals who consistently profit using straightforward systems. Take John Banks’ 'The Easy As 1–2–3 Betfair System' as an example. He performs a few simple checks to identify qualifying horses before placing his bets.

It's truly that straightforward. There’s no complex learning curve or intricate calculations; you simply verify a specific criterion and proceed.

With this system, you could potentially double your investment every three to four weeks.

Learn more about it here: Easy As 1–2–3

Kind regards,

John Harrison

P.S. You can begin with as little as £100, and within six months, you might find yourself with a tax-free sum of £12,800! Here's that link again: Easy As 1–2–3

CLICK HERE to discover how to make your first £1,000 online! The FASTEST & EASIEST way to build an online business… in just five simple steps!

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