Whats your views on Budget 2015?

[Wijay@WISAccountancy]

One director? I assume two directors one employee makes no difference its the number of employees that counts?

Like someone said, whats to stop you employing your mrs as an admin assistant on a zero hours contract? Two employees.

I know at the moment employing the mrs on £10K a year to 'do the books' is considered a bit of a pisstake and likely to flag up. I understand the rule is you can't pay a wage to a family member that you wouldnt pay to someone else.

1 hour a month submitting my invoices etc. Zero hours contract. 1 hours pay per month. Two employees.....

You can't pay £1 per hour - remember the national minimum living wage will be £9...heheheeee

[psychocandy]

Hmm let's analyse that statement. How many employees can I count in that sentence.....



You would think they are not stupid and already have this piss take on their radar so could kill two birds with one stone if they word it right.

Question though. Does your wife have a contract of employment?

Ummm you can be a Director without being an employee. My Ltdco has two directors - me and the mrs - so we both get dividends but Im the only employee. And I get a salary.

No wife does not have a contract of employment - but neither do I. Am I right its not necessary for directors?

Yes agree it would be too obvious to do this but who knows....

[DaveB]

Ummm you can be a Director without being an employee. My Ltdco has two directors - me and the mrs - so we both get dividends but Im the only employee. And I get a salary.

No wife does not have a contract of employment - but neither do I. Am I right its not necessary for directors?

Yes agree it would be too obvious to do this but who knows....

Being a director has nothing to do with getting dividends. You only need to be a sharehoilder to get them.

[Kenny@MyAccountantFriend]

Downside to taking on another employee would mean that you are subject to auto enrolment which a single director company would not be.

So it will become a lesser of two evils, either take the hit on the NI (or pay a lower salary) or have to auto enrolment to make use of the allowance.

[psychocandy]

You can't pay £1 per hour - remember the national minimum living wage will be £9...heheheeee

No but I can offer her a zero hour contract and pay her for one hour a month? £10.

[SpontaneousOrder]

Downside to taking on another employee would mean that you are subject to auto enrolment which a single director company would not be.

So it will become a lesser of two evils, either take the hit on the NI (or pay a lower salary) or have to auto enrolment to make use of the allowance.

Can't they just opt-out of auto enrolment? Have I missed something more sinister?

[Kenny@MyAccountantFriend]

You can't opt out until it is set up. So you would have to have it set up first then they can opt out.

[meanttobeworking]

So the dividend thing sounds really drastic, but actually if you are joint shareholder with wife, and neither go over 40% threshold, you'll still overall be considerably better off than PAYE'ing the same amount wouldn't you?

And doesn't this massively affect ALL small businesses, not just the contractors? And if so, why isn't there more people worrying about it? According to citywire...

"Osborne claimed the move would leave 85% of those receiving dividend income paying the same or less in tax"

[Ned]

Hi,

First year contractor. So bear with me as I'm not entirely clear how exactly this will affect things. Let's assume Salary of £8,000 and Net Dividend of £100,000. How much would one's personal tax bill be with these new rules?

[Maslins]

So the dividend thing sounds really drastic, but actually if you are joint shareholder with wife, and neither go over 40% threshold, you'll still overall be considerably better off than PAYE'ing the same amount wouldn't you?

And doesn't this massively affect ALL small businesses, not just the contractors? And if so, why isn't there more people worrying about it? According to citywire...

"Osborne claimed the move would leave 85% of those receiving dividend income paying the same or less in tax"

First para - yes. If no low earning spouse to split dividends with, it'll still be slightly beneficial tax-wise to contract via a Ltd Co than to be PAYE, but the difference is reduced.

Second para - yes. Early days, but I think many small biz owners have cottoned on that this'll make them a bit worse off. To some extent offset by planned drops to CT rate.

Last para - I imagine that is true (tho obv don't have precise figures). Think of all the people on salaries putting them in higher rates, who have a handful of shares in some listed company that pays out modest dividends. £5k allowance should cover any dividends. Currently they'd likely suffer 25% effective rate on those dividends.