Dave Chaplin, CEO, ContractorCalculator:
The doom and gloom merchants are calling 2009 as being a flat year or worse. So, now might be a time to think about taking some time off and going to live somewhere cheaply for a year whilst you ride the recession out. Being in blighty without a job can be costly.
I did this myself after the dot com bubble burst, and spent 6 months back packing in Asia. Whilst I didn’t exactly travel on a shoe string, it was a damn site cheaper than living in London without a job. You can quite easily live in style on £1,000 a month.
If you are running a limited company and do plan on taking extended time off then keeping under your higher rate tax limit before April 2009 would also be a sensible option. Why pay 40% tax this tax year, if you don’t plan on working next year but will need the money you earned this year to.
Just leave it in the company and draw it next year.