Hi all
I have a question which I’m a bit perplexed about.
My situation is this – my current contract will expire end of July - I’ve been looking around for other roles for the last 2 months but found nothing suitable (yes, the last 2 months - the project has fallen through and I'm being booted much earlier than expected - grrr).
I’m not completely sure I’ll get another job quickly (my rather unique skill set is not currently in demand due to reasons beyond my control). Also, due to the attitude of this current Government I’d like to leave Contracting for good – but that’s another topic.
My dilemma is, should I close the company down when this contract ends, or keep it running even though there may be no income for an indefinite period of time?
My options, as far as I see it are, and I am genuinely, I suppose naively, unsure which is the best thing to do – I don’t close Ltd’s down every day! (also, for what it’s worth, I estimate that the remainder of company funds after necessary bills/taxes are paid will be between £7k - £10k):
(a) Close Ltd. down & pay any remaining bills/taxes, extract remaining profit taxed @ Capital Gains
(b) Close Ltd. down & pay any remaining bills/taxes, extract remaining profit as Divis’s taxed @ normal Divi rates
(c) Option (a) or Option (b) but make Ltd. ‘dormant’ rather than closing it down
The best thing (from a purely selfish perspective) is option (a). But, I assume this would be tantamount to avoiding tax if I returned to contracting as my next form of employment using a Ltd. (not quite sure if there is a time period defined or it is assessed via other criteria – Phoenix Clause?).
Option (b) looks a safer bet – as I’ve paid all taxes in a straightforward & direct way – but unaware of any potential pitfalls?
Option (c) – never made a company dormant – sounds like a lot of hassle; but open to be swayed.
Obviously if I were to get offered a contract role in the meantime everything stays as-is (and if a Permanent role then Option (a) ), but come September, and there’s nothing on the horizon, I need to be able to maximise the amount of money I have at my disposal to keep the roof over our heads, and option (a) provides just that (I also have savings which can be utilised, but every penny counts!)
I suppose it could be considered a conflict of interest - so need some independent advice...
Just to make it clear – I am NOT, repeat NOT, looking for a way to avoid paying any debts/taxes or looking for a way to circumvent the law in any way!!
Are there any golden rules that I should adhere to?
Any advice?
Any particular internet info I should read?
Thanks for reading a long rambling post – any advice appreciated.
I have a question which I’m a bit perplexed about.
My situation is this – my current contract will expire end of July - I’ve been looking around for other roles for the last 2 months but found nothing suitable (yes, the last 2 months - the project has fallen through and I'm being booted much earlier than expected - grrr).
I’m not completely sure I’ll get another job quickly (my rather unique skill set is not currently in demand due to reasons beyond my control). Also, due to the attitude of this current Government I’d like to leave Contracting for good – but that’s another topic.
My dilemma is, should I close the company down when this contract ends, or keep it running even though there may be no income for an indefinite period of time?
My options, as far as I see it are, and I am genuinely, I suppose naively, unsure which is the best thing to do – I don’t close Ltd’s down every day! (also, for what it’s worth, I estimate that the remainder of company funds after necessary bills/taxes are paid will be between £7k - £10k):
(a) Close Ltd. down & pay any remaining bills/taxes, extract remaining profit taxed @ Capital Gains
(b) Close Ltd. down & pay any remaining bills/taxes, extract remaining profit as Divis’s taxed @ normal Divi rates
(c) Option (a) or Option (b) but make Ltd. ‘dormant’ rather than closing it down
The best thing (from a purely selfish perspective) is option (a). But, I assume this would be tantamount to avoiding tax if I returned to contracting as my next form of employment using a Ltd. (not quite sure if there is a time period defined or it is assessed via other criteria – Phoenix Clause?).
Option (b) looks a safer bet – as I’ve paid all taxes in a straightforward & direct way – but unaware of any potential pitfalls?
Option (c) – never made a company dormant – sounds like a lot of hassle; but open to be swayed.
Obviously if I were to get offered a contract role in the meantime everything stays as-is (and if a Permanent role then Option (a) ), but come September, and there’s nothing on the horizon, I need to be able to maximise the amount of money I have at my disposal to keep the roof over our heads, and option (a) provides just that (I also have savings which can be utilised, but every penny counts!)
I suppose it could be considered a conflict of interest - so need some independent advice...
Just to make it clear – I am NOT, repeat NOT, looking for a way to avoid paying any debts/taxes or looking for a way to circumvent the law in any way!!
Are there any golden rules that I should adhere to?
Any advice?
Any particular internet info I should read?
Thanks for reading a long rambling post – any advice appreciated.
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