AK
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Registered: 5th Jul 00
Location: Aberdeen City
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quote:
Originally posted by Robbo
quote:
Originally posted by Cosmo
As a director of the company you can pay yourself a 'wage' and not pay any income tax on it - atleast thats what we do 
no you cant
if the wage is small enough to be your tax allowance, then yes i'd think
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Robbo
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Registered: 6th Aug 02
Location: London
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The main advantage of forming a LIMITED company is the limited liability it gives you... you are limited to losing only that which you invest in the company
Any other benefits are purely circumstantial and not deliberate
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Hammer
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Registered: 11th Feb 04
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quote:
Originally posted by Robbo
quote:
Originally posted by Hammer
One of the main advantages of starting a limited company is so that when you breach the upper earnings limit you can leave any excess profit within the company (taxed at 22%) rather than incur the 40% you would as a sole trader.
If you're already recieving a 100% tax rebate that's that advantage redundant?
Am i miles off with that then? 
If Adam is already recieving all his tax money back, i'm asking what is the advantage in starting a limited company? What benefit is there?
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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quote:
Originally posted by AK
quote:
Originally posted by Robbo
quote:
Originally posted by Cosmo
As a director of the company you can pay yourself a 'wage' and not pay any income tax on it - atleast thats what we do
no you cant
if the wage is small enough to be your tax allowance, then yes i'd think
Well yes obv but I was referrign to the dividend point, where you effectively pay no tax
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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quote:
Originally posted by Hammer
quote:
Originally posted by Robbo
quote:
Originally posted by Hammer
One of the main advantages of starting a limited company is so that when you breach the upper earnings limit you can leave any excess profit within the company (taxed at 22%) rather than incur the 40% you would as a sole trader.
If you're already recieving a 100% tax rebate that's that advantage redundant?
Am i miles off with that then?
If Adam is already recieving all his tax money back, i'm asking what is the advantage in starting a limited company? What benefit is there?
yeah pretty much lol
see my last point on the advantage
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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quote:
Originally posted by Cosmo
quote:
Originally posted by Robbo
quote:
Originally posted by Cosmo
As a director of the company you can pay yourself a 'wage' and not pay any income tax on it - atleast thats what we do
no you cant
Im not sure what we are doing then, but we are def paying ourselves (above board!) without paying income tax. Classed as self employed so pay NIC contributions that way.
Yeah as I said, you'll be doing it via dividends where you effectively pay no actual tax 
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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quote:
Originally posted by Cosmo
quote:
Originally posted by Robbo
quote:
Originally posted by Cosmo
As a director of the company you can pay yourself a 'wage' and not pay any income tax on it - atleast thats what we do
no you cant
Im not sure what we are doing then, but we are def paying ourselves (above board!) without paying income tax. Classed as self employed so pay NIC contributions that way.
The differnece between say Joe and yourself is that Joe was using it (probably by order of whoever he was workign for) to get around tax laws whereas you have a legitimate business
(Just in case anyone wonders why Joe couldnt do it and Cosmo can)
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Fee
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Registered: 16th Nov 05
Location: With AK
User status: Offline
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So would a sole trader be better than a limited company
And would companies contract you on a sole trader basis?
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AK
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Registered: 5th Jul 00
Location: Aberdeen City
User status: Offline
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the advantage is that I wont be working for another company that leaches half my day rate off me.
I'd potentially double my possible earnings, but just need to weigh up whats what, and what is possible.
I'm still no clearer really
So...
Can someone do an example based on the following.
Company income per annum - 120k
I'd take an income of 20k per annum
and take the rest out as profit (dividends?)
How much would I be stung?
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Robbo
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Registered: 6th Aug 02
Location: London
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It really depends what you are wantign to do but my initial guess would be that you are onyl lookign inot creatign a limited company to pay less tax in which case chances are the HMR&C will also deduce this and inflict a rule called IR35 on you which deems you to be a sole trader in any case... you still kepe the benefits of beign Ltd (so limited liability, looks more professional etc etc) but pay tax like any other tom dick and harry
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Robbo
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Registered: 6th Aug 02
Location: London
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Check the HMR&C website, there should be tax calculators on there
I ahvent really got time to heck the rates and clacs again and its been too long to do them off the top of my hea dlol
If you would only be contracting to one company then it is a 100% no no, you can't do it... simple as that
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Hammer
Member
Registered: 11th Feb 04
User status: Offline
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quote:
Originally posted by Robbo
quote:
Originally posted by Hammer
quote:
Originally posted by Robbo
quote:
Originally posted by Hammer
One of the main advantages of starting a limited company is so that when you breach the upper earnings limit you can leave any excess profit within the company (taxed at 22%) rather than incur the 40% you would as a sole trader.
If you're already recieving a 100% tax rebate that's that advantage redundant?
Am i miles off with that then?
If Adam is already recieving all his tax money back, i'm asking what is the advantage in starting a limited company? What benefit is there?
yeah pretty much lol
see my last point on the advantage
http://www.articlealley.com/article_651855_15.html
Apperas to back up my point roberto 
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Cosmo
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Registered: 29th Mar 01
Location: Im the real one!
User status: Offline
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Although if you were contracting others to it also....
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AK
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Registered: 5th Jul 00
Location: Aberdeen City
User status: Offline
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but I get all my tax back anyway.... so in thoery i'd still be able to do that
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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quote:
Originally posted by Hammer
quote:
Originally posted by Robbo
quote:
Originally posted by Hammer
quote:
Originally posted by Robbo
quote:
Originally posted by Hammer
One of the main advantages of starting a limited company is so that when you breach the upper earnings limit you can leave any excess profit within the company (taxed at 22%) rather than incur the 40% you would as a sole trader.
If you're already recieving a 100% tax rebate that's that advantage redundant?
Am i miles off with that then?
If Adam is already recieving all his tax money back, i'm asking what is the advantage in starting a limited company? What benefit is there?
yeah pretty much lol
see my last point on the advantage
http://www.articlealley.com/article_651855_15.html
Apperas to back up my point roberto
to be fair thats significantly better worded than your glaswegian babble and I now get your point
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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quote:
Originally posted by AK
but I get all my tax back anyway.... so in thoery i'd still be able to do that
why do you get your tax back? but no, your company would still be deemed to be in breach of IR35
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Hammer
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Registered: 11th Feb 04
User status: Offline
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I spent half my time at Uni in the boozer, give me a break 
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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FLOL
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Fee
Member
Registered: 16th Nov 05
Location: With AK
User status: Offline
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I think as an employee of the company, you would get tax back on what you are paid, but the company would still have to pay corporation tax
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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If for whatever reasosn Adam gets most tax back then yeah thats basically correct Fee
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AK
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Registered: 5th Jul 00
Location: Aberdeen City
User status: Offline
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of 22% on its earnings yes?
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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21% this year I think it said
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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UP TO £50k, 28% thereafter alhtough effectively 23-24% because of marginal tax relief
If this is something you are seriosuly cionsideirng then you would be much better off goign into an accountants and seeign a proper tax specialist
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Fee
Member
Registered: 16th Nov 05
Location: With AK
User status: Offline
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It's something he always seriously considers when he away on this job...then gets home and forgets about it!
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Robbo
Member
Registered: 6th Aug 02
Location: London
User status: Offline
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Lol
Most accountants will do a free one off appointment so its a good idea really as its a lot more complex even than im making out
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