Ltd Company

[steptoe]

Steps - I don't follow. I have subbies I use and I hold an exemption certificate, so pay my tax twice a year, my subbies are 20%, so I pay them less 20% and submit their 20% to the HMRC.

            I get taxed on my net profit for my accounting year, less expenditure which includes all labour.

            When I invoice my customer its for a total sum and does not outline material or labour content as its a tender sum with interim valuations each month, it's not within my interest to let them know what part is labour or materials as that will expose my margins to other competitors.

Daywork or if it is a materials at cost + then labour, includes for my hourly rate, regardless of what I pay out.

If you have had tax problems in the past I understand its harder to get an exemption, and over the years due to my latish tax payments, which was out of my control I have had mine taken off me, but then appealed and got it back.

I do know a few contractors, that are 20% then 20% from subbies, but this in my mind is not the way to go, as you say tax is going out twice on the same sum of money, although I have heard people say that they put the labour down as expenses/materials, so do not pay tax twice, don't see how that works though. 

does 714/715 still exist then?

I thought it had been withdrawn, its been quite a while since Ive worked in the UK, at that time it was either SC60 or 714/715

if its still about[or its equivalent], then that would probably be the way forward for me.

 

[Cirrus]

I went Ltd 3 years ago. Big tax breaks and the right accountant won't charge you a fortune. My first accountant tod me his fees for the year were £2000. He lasted a few weeks and my current guy charges me £480 a year and does payroll, vat, directors self assessment etc etc.

If you are going to get into high numbers with subbies to pay, working with big companies etc then going Ltd is the right thing to do. You eliminate a lot of the personal risk. The banks will only come after you if you have borrowed from them and signed personal guarantees. If you go bump then the insolvency practitioner, who's job it is to recover as much in funds as he can will look to see if you have acted improperly and if your directors loan account owes the company money then you will have to pay it back.

As for being audited - only when your turnover exceeds £5.6 million a year.

 

[steptoe]

Im as confused as ever. :shakehead

 

[steptoe]

I think I need to speak to an account about this.

 

[Apache]

Depending how you chose to pay yourself you can easily save the 9% national insurance. You are taxed at 20% corporation tax and can draw out up to the higher rate threshold with no further tax liability. Most directors will take a low wage (so entitled to full state pension) and the rest as dividends.

Our accountant charges more but I will save his fee many times over.

 

[Steve3948]

Steps - Yes the 714 still exists as an exemption certificate.

I would chat with your accountant.

 

[steptoe]

Steve, thanks, I didnt know that, I need to get an accountant chat ASAP it seems,

Apache, if it wasnt for the wife my tax would/could be even lower, 

I used to work in manxland. 

 

[Cirrus]

A good accountant will give you the best advice. I pay the directors of the company a salary of £675 a month (tax free limit) and then the rest is dividends which are taxed at a rate as low as 10%. Last year we paid corporation tax (a tax on the company profits) but paid no personal tax.

It is a minefield so take good advice. If I can help, feel free to PM me.

 

[Apache]

Steve, thanks, I didnt know that, I need to get an accountant chat ASAP it seems,

Apache, if it wasnt for the wife my tax would/could be even lower, 

I used to work in manxland. 

Does your wife work?

 

[steptoe]

Yes Paddy, reasonably good job too, not a.brilliant wage, but good bonuses,

It would be an ideal situation if she got made redundant and then ltd would be a certainty with her being co secretary.

BTW, redundancy is a possibility, if we are lucky.

Sorry to all the people hoping to keep their jobs, but after 12+ yrs in the job and pay offs happening all over my wifes firm she isnt going to jack in freely.

 

[Apache]

Steps - she can be company sec anyway.

 

[steptoe]

Paddy, atm.she.can barely walk, back on sick last week. Her back is gone.

 

[Apache]

Company sec doesn't involve making tea and filing.........

(hope she feels better soon, next time your teat will be ready when you get home............. )

 

[kerching]

Company sec doesn't involve making tea and filing.........

(hope she feels better soon, next time your !!!TEAT!!!! will be ready when you get home............. )

Erm, may want to rephrase that..............just saying!!!!!!!!!!!!

Cannot highlight your Freudian so it is in !!!!!!!XXXXXXXXX!!!!!!!!!!!

Curse this iPad

 

[binky]

another little point, get child allowances paid in your name so your National Insurance is paid for your pension - doesn't apply in all cases as it depends on circumstances. As said above get an accountant, they should be able to save you more than they cost, and the Tax man is less likely to investigate, (insurance against an investigation isn't a bad idea aswell). It also means you can worry about the business rather than tax affairs. As I've got older I have become more persuaded of the benefit of using the right people to cover stuff I don't understand or have time to investigate.

 

[wozz]

Being persued as director is very different to losing your house. I went Ltd to avoid potentially losing 20 years hard work for me and the wife, should the apprentice I had just taken on do something daft and burn something expensive down, like a block of flats. There are some tax benefits aswell.

Isnt that why we have insurance of a appropriate level? 

 

[steptoe]

Isnt that why we have insurance of a appropriate level? 

I dont think insurance will cover you for being negligent.

 

[Sidewinder]

PI is to cover for professional negligence.

Steps, I'll do what I promised tomorrow as long as I can sort out my computing issues, which I am working on now.

It can be sorted.

No need for a Co. Sec. Under current Co. law.

1 Person can be Dir & Co. Sec.

Give me a few hours, possibly 24.

 

[steptoe]

cheers sidey, no worries, and, ATM no immediate panic, Im just trying to do what I normally dont, get prepared in advance.

I dont even know what a Co sec does, I was simply going to have myself as director, [and possibly the wife depending on legal implications] .

I would like to seperate the business from personal as much as possible if it is viable.

 

[wozz]

I dont think insurance will cover you for being negligent.

I thought that was why you had insurance against the possible outcome of mistakes.  

Also whats the point in battys case of someone going after a house (say £100k) if your actions have caused (for arguments sake) £2,000,000 worth of damage.