non-spouse director

[DaveB]

Yeah... What TCP says ya cockwomble.

WankPuffin, if you don't mind.

Mr Wankpuffin to you.

[TheCyclingProgrammer]

Yeah... What TCP says ya cockwomble.

It's the best I can manage typing one handed in an iPad with a 3 day old baby in the other hand!

[northernladuk]

WankPuffin, if you don't mind.

Mr Wankpuffin to you.

Well yeah but I didn't want to be the one that got banned for using that work in the prof forums...

[northernladuk]

It's the best I can manage typing one handed in an iPad with a 3 day old baby in the other hand!

No one likes a show off.... and congratulations!!

[damien3]

hi so the reason for this question was to avoid payments to the student loans company. the payments are 9% on your gross earnings above 17K that means anything you ear above that will be penalized at 9%, it is not a tax however it is a loan repayment so to avoid it should be completely legal. the question is if you can somehow reduce that fee but keep HRMC happy somehow by keeping your total dividend payout below the threshold of £31K for higher rate tax thereby not looking like your avoiding tax would you still be caught up in this settlements legislation if the extra director was a family member non-spouse?

below are example scenarios of what you might save using a £10600 salary and dividend of £31000

self assessment scenario A (1 director)
salary 10600
dividend 31,000
gross earning = 41,600
loan repayment threshold (17K)
loan repayment (@9%) = £2214

scenario B (50/50 split two directors)
salary =10+600
dividend = 15,500
gross earnings = 26100
loan repayment threshold (17K)
loan repayment (@9%) = 819

= saving of £1395

feedback welcome. action will be taken one way or another on this by me

[northernladuk]

IMO the non spouse director is questionable at best... artificial convoluted scheme to aggressively avoid the student loan it's just too much.

You probably won't listen but leave it alone....

p.s... at the bottom of scenario B you need to add a line showing the liabilities if you get caught so it doesn't look so rosy and tempting, other wise you might as well have an option C which is just fudge the books completely.

[TheFaQQer]

hi so the reason for this question was to avoid payments to the student loans company. the payments are 9% on your gross earnings above 17K that means anything you ear above that will be penalized at 9%, it is not a tax however it is a loan repayment so to avoid it should be completely legal. the question is if you can somehow reduce that fee but keep HRMC happy somehow by keeping your total dividend payout below the threshold of £31K for higher rate tax thereby not looking like your avoiding tax would you still be caught up in this settlements legislation if the extra director was a family member non-spouse?

below are example scenarios of what you might save using a £10600 salary and dividend of £31000

self assessment scenario A (1 director)
salary 10600
dividend 31,000
gross earning = 41,600
loan repayment threshold (17K)
loan repayment (@9%) = £2214

scenario B (50/50 split two directors)
salary =10+600
dividend = 15,500
gross earnings = 26100
loan repayment threshold (17K)
loan repayment (@9%) = 819

= saving of £1395

feedback welcome. action will be taken one way or another on this by me

Interesting turn of phrase that you see repaying the loan that you took from the taxpayer as "penalizing" you.

[damien3]

@northernladuk i would put figures at the bottom of scenario B if i knew at all what they could be


@TheFaQQer

my opionion its not a turn of phrase it's just savings which i'm sure everyone can appreciate

[TheFaQQer]

IMO the non spouse director is questionable at best... artificial convoluted scheme to aggressively avoid the student loan it's just too much.

You probably won't listen but leave it alone....

p.s... at the bottom of scenario B you need to add a line showing the liabilities if you get caught so it doesn't look so rosy and tempting, other wise you might as well have an option C which is just fudge the books completely.

Non-spouse director is irrelevant - it's who owns the shares that are entitled to a dividend payment that's important. And since the OP hasn't seen the difference between the two, trying to fudge the system to avoid repaying the loan seems on the way to a world of pain to me.

[northernladuk]

@northernladuk i would put figures at the bottom of scenario B if i knew at all what they could be

Double it for the penalty, add about 20% compound interest to be on the safe side. Add a load of bank charges and the interest on the loan you may have to take out because you don't have the cash to pay everyone back. Add a figure that relates to 6 months or worry/pain while all this drags on and then see what you come out with. IMO it will be too much.....