Members of boy band One Direction have been advised to become company directors in order to minimise their tax bill, according to a source speaking to The Sun newspaper. The group were formed by X Factor, finishing third in the seventh series of the show. One Direction’s debut single ‘What Makes You Beautiful’ was released in September 2011, shooting to the number one spot in the charts.
The members of the group, Harry Styles, Louis Tomlinson, Zayn Malik, Liam Payne and Niall Horan have become directors of their own companies, 1D Media and PPM Music. Their earnings will go through the companies, to have a tax liability of 28 percent, the current rate of Corporation Tax. As individuals earning more than £150,000 are currently charged tax at 50 percent, the move will save 22 percent on income. By becoming directors of their own company, One Direction members could save £220,000 for each £1 million earned.
The boyband members have listed their registered office as an accountant firm in Ireland, Live Wire Business Management. Other artists who have used their accounting services include Westlife, Girls Aloud and Ronan Keating. As One Direction is becoming popular in the United States, careful management of their finances could save them a lot of money in the future.
Any business, whether a builder working as a sole trader or a boy band who become directors of a limited company, should seek advice from low cost accountants to ensure future tax bills will be minimised.
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