How to get the most of out LTD after short period contracting

[Turbine]

Hi,

I turned contractor 10 months ago after many many years as a permie. Had grand plans to contract for ever but got offered a job by the people I have been contracting with and have decided to take it. They offered a couple of times and the last time I bit but am looking forward to it. It's a new job doing interesting stuff with a good company and if I want to go contracting in the future I will be better set up. Anyway on to the point of this post....

During my time contracting I have followed the usual pattern of small salary £500 pm and dividends every so often but in reality have not taken much out. I will be left with quite a sizeable chunk in my company bank account when I go permie. I would obviously like to get as much out without paying tax as I can and wondered what other people have done in this situation. I raised the question of Entrepeneurs relief with my accountant who said this was not applicable in this circumstance although he did mention using the £10,000 CGT allowance as a possible. A contractor friend also mentioned making myself redundant which I think you can take £30,000 tax free although he thought it might bring up a few red flags with Hector.

I will be speaking to my accountant again regarding this but would appreciate others thoughts on this.

Cheers,

Turbine

[TheFaQQer]

If you've only had the one place of work, then that becomes your permanent place of employment and you shouldn't have claimed expenses for travel / subsistence.

[Turbine]

I have never really worked at the companies HQ, only for couple of days at a time, I have mainly been at their client site or other companies sites that they do business with.

[northernladuk]

Hi,
A contractor friend also mentioned making myself redundant which I think you can take £30,000 tax free although he thought it might bring up a few red flags with Hector.

The redundancy question has been asked a few times and the answer appears to be a flat no but reading back no one ever gave a reason why. One of the reasons not to do it is to then re-open anoterh LTD as this would be pheonixing and will not go down well but you are winding your company up to go permie, not re-open another.

May not be any of our business but you say sizeable amount of money. in 10 months this will be what 60-70K when all taxes paid? Did you divi yourself to the threshold in the last tax year and have you done it this tax year yet? Permie pay in the last 3 months won't eat in to it hugely will it?

[Turbine]

Yes, in that regionish! Have not taken all the dividends as yet. I did set up a pension and put all my other pensions into it and it dropped 10% in the first week so am a bit wary of putting money into that! Was hoping to get enough money out to buy a couple of flat(deposits anyway). Going to spend the next 3 days getting my accounts together to see exactly where I sit.