Developing a Money Mindset
As a business owner, I have to pay two types of taxes each year. My company pays tax (corporation tax) and as the director of my company I pay tax on my earnings also. Regardless of how much my business makes each month, I pay myself the same monthly salary. The idea is, I pay myself a certain amount that keeps my total annual (personal) earnings in the lower tax bracket so I can pay the least amount of tax possible. I know this is boring but bear with me.
The 5k tax fiasco
A couple of weeks ago, whilst I was soaking up the sun on my recent holiday, lying on a sun lounger, mojito in one hand, phone in the other, I had an email come through from my accountant.
Attn: “Personal tax 20/21”
Now I wasn't anxious at all, I save the appropriate amount for my tax every single month, in a separate account so that I never have any negative feelings towards my tax bill. After reading all the money mindset books I could get my hands on, I now go to great lengths to feel happy and grateful paying my taxes, that the process is filled with the ease of “more than enough, abundance and the flow and circulation of money,” blah blah blah. However, as I opened this particular email, this is what I read:
Hey Nikki,
As you have gone over the basic rate allowance for income in the 20/21 year, you will have a higher tax to pay. The amount to pay is: XXXXX for this year.
Umm what now…?? The figure was around 5k more than I had budgeted for. WTF!!! I cannot tell you how furious I felt at that moment. I immediately started to blame… “Why didn't they warn me? They haven't done their job, I'm going to arrange a call and find out how they let this happen?”… and on and on and on. I took a deep breath and grumpily looked at the documents they had forwarded to me. Two attachments that detailed in black and white what a successful year I'd had.
Then something really bizarre happened next
All my stress and anger and tension sort of melted away. With the figures in front of me. A whole new thought process came into my head.
Have I budgeted for that extra 5k? No
Did I have the extra 5k sitting in my business account doing nothing? Yes
Did I need to worry about paying the bill? No
Was I cross that I had to give that money to the taxman when I had purposely tried to keep it from him? Not anymore and here’s why…
Without realising, I had placed self-imposed limitations on the amount of money I could ever have. By avoiding that tax threshold I was effectively saying even if my business makes a million pounds, I can never personally earn more than the lowest tax bracket of 50K a year.
Ultimately earning 50K is a HUGE deal to me and one I think I should more than comfortably live on and be content with. Inadvertently taking myself over the tax threshold, was the gentle nudge I needed to open myself up to earning and receiving larger sums of money.
Here comes the truth...
If I want to build a wildly successful biz, I need to be good with earning more and paying more taxes. Now that I've accidentally crossed that threshold, I have the freedom to pay myself whatever I like… but more importantly, I can pay myself a salary that matches the success of my business, rather than capping it at the amount I need to avoid paying tax.
A good old push from the universe
Looking back it's clear to see, I had a money block I didn't even know was there… That I am not allowed to earn more money than I think I should. But I am allowed! So I'm paying my accidental tax without questioning it. I’m leaning into the circulation of money and believe this is all happening to lead me to my step in building and growing a business. I’m not holding myself back from earning and receiving more. I’m trusting that without limitations the possibilities are actually endless…
Wow! Almost makes me excited to pay my tax bill... Almost, lol.
Do you have any bogus blocks around money? Do you hold yourself back from money because you feel guilty or greedy? I used to do this all the time. Time to get rid of those limiting beliefs and make some empowering beliefs work for you instead. What will yours be? Write them down to help you focus on them.
Whatever you do this week - know that the choice to #MakeitHappen is all yours… So do whatever it takes to make it amazing.
