New contractor - Need help with basic stuff

[Yameen]

Dear forum members,

I have just started doing contracting from last month (Nov). I am the only director of the company. I and my wife are both shareholders of the company. The company was formed in mid Oct and I register for VAT from 1st Nov.

I need help with some basic questions:

1. I was on permanent job till end of Oct and have earned gross income of around £45K in this financial year. So if I now give myself minimum salary from my own company, will it be on 40% tax till March 2017? As an example if I set £10K as my annual salary, until April 2017 (new financial year) do I have to pay 40% tax on my salary?

2. Do I and my mrs have to complete self assessment by 31st Jan 2017 or will it be in Jan 2018? I and my wife were both on permanent jobs till end Oct and received P60s for tax year 2015-16.

3. Which month my company will be required to pay corporation tax? Will it be Oct 2017 as I started working in Nov 2016?

4 How the first year for dividend will be calculated? Will it be from Nov to Oct every year for my company?

5. Can I take dividends in January or do I have to wait for certain period before I can take dividends?

Thanks in Advance.

[b0redom]

What does your accountant say? </NLUK>

[Yameen]

He is on leave for next couple of weeks so If I was wondering if anyone from this forum can help me with these queries.

[malvolio]

He is on leave for next couple of weeks so If I was wondering if anyone from this forum can help me with these queries.

You could try reading the guides. There's a pile over there on the right of the page, and there's the Guide to Freelancing at http://www.ipse.co.uk which will explain everything. There will still be questions, and d of course you should ask for help, but at least you will have a basis of knowledge for the answers.

A couple of golden rules to get you started:

1. YourCo's money and Your money are not the same thing. Keep them well separated and identified., physically and in your mind.

2. Dividends are paid from post-tax profits at your company year end. You can't divi money you don't have or that is needed for legal stuff like CT and VAT, so don't treat them as petty cash.

3. Accountants offer advice. Just that, nothing else. It's up to you to know and understand how to apply it.

[Alan @ BroomeAffinity]

In reply to your questions:

1) probably as well not to pay salary until after 06/04/17, but dividend only.

2) Jan 2018

3) your co incorporated Nov 16, then your year end is 30/11/17, therefore ct is payable 01/09/18.

4) dividends can only be paid from retained profits. You can theoretically pay as often as you like but best to limit this to quarterly if poss, monthly at most.

5) yes. If there's profit

Has your accountant been on holiday since before you started? [emoji3] These questions would normally be covered in the set up process.

[Yameen]

Thanks alot for your help everyone.

No, he just went on holiday last week so should have covered those in advance.

[Yameen]

Thanks alot for your help everyone.

No, he just went on holiday last week so should have covered those in advance.