Freelance Accountants in Northwood

Almost certainly a limited company with spouse shareholder, combined with substantial employer pension contributions. A typical Northwood setup: £12,570 director salary, spouse holds 25-40% shares paid £10-15k dividends, £40-50k/year into director's pension from the company, remaining dividends drawn to the target take-home — ideally keeping adjusted net income below £100k to avoid the cliff edge. The matched accountant models this specifically for your circumstances, and revisit annually because the optimal figures shift with tax rates, allowances, and your income target.

For individuals with threshold income over £200,000 and adjusted income over £260,000, the standard £60,000 pension annual allowance reduces by £1 for every £2 of adjusted income over £260,000, down to a minimum of £10,000 at adjusted income of £360,000+. For senior Northwood contractors pushing these thresholds, pension planning becomes more complex — carry-forward from previous years becomes particularly valuable, and the decision about how much to contribute each year depends on your projected income trajectory.

Standard structure: NHS work via your PAYE consultant contract (unchanged), private practice through a limited company. The Ltd gives you timing control over dividends (delaying drawdowns to avoid cliff edges), ability to make employer pension contributions beyond NHS superannuation, and spouse shareholder flexibility. Key tax traps: the £100k-£125k cliff, the annual allowance taper (very relevant at consultant earnings), and NHS pension LTA considerations. We manage all three alongside each other annually.

Members' Voluntary Liquidation (MVL) is almost always the best route for Northwood contractors with meaningful retained profits. MVL extracts retained profits as capital gains, taxable under Business Asset Disposal Relief at 14% from April 2026 (up to £1m lifetime limit), versus 33.75%-39.35% dividend rates. Planning needs to start 12-24 months ahead: the company must have genuinely ceased trading, accounts must be clean, and you can't take income in the two years before. For £300k-£800k retained profits, MVL often saves £80,000-£200,000 in tax versus phased dividend drawdown.

Yes, but be careful. Investing retained profits through the company (in stocks, property, or other assets) triggers a series of implications: the company becomes a Close Investment Company for some purposes, loses Business Asset Disposal Relief on eventual MVL if investment activity is substantial, and may trigger different corporation tax treatment. For small surplus cash balances a deposit account or short-term investment is fine; for substantial ongoing investment activity we'd usually recommend a separate investment vehicle (family investment company or personal investment). We advise on the boundaries.

For the core company tax structuring — yes. For full estate planning and inheritance tax work — no, that's specialist territory and accountants in our network work alongside your IFA and tax solicitor rather than duplicating. Accountants in our network handle the interaction between company structure and estate considerations (e.g. Business Property Relief on private company shares, family investment company setup alongside the trading company, employer pension contributions as IHT-efficient wealth transfer). For the will and trust side, accountants in our network will refer you to a trusted solicitor.