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New Public Sector Rules and Business Expenses

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    New Public Sector Rules and Business Expenses

    Under the new PS rules there will be no 5% expense allowance for running your company.

    However, if caught by this, you are still running a Ltd company and you will still have legitimate business expenses (insurance, accountancy, filing fees, etc.). Presumably you will still be able to (and it would be advantageous to) pay for these through the LtdCo using retained profit from previous years?

    (And in that case, in the first year at least, would this potentially result in a trading loss which you can then carry back to get a small corporation tax refund?)

    #2
    Originally posted by supersteamer View Post
    Under the new PS rules there will be no 5% expense allowance for running your company.

    However, if caught by this, you are still running a Ltd company and you will still have legitimate business expenses (insurance, accountancy, filing fees, etc.). Presumably you will still be able to (and it would be advantageous to) pay for these through the LtdCo using retained profit from previous years?

    (And in that case, in the first year at least, would this potentially result in a trading loss which you can then carry back to get a small corporation tax refund?)
    Until we get the details next Monday (December 5th) nobody knows..
    merely at clientco for the entertainment

    Comment


      #3
      Can't see why not, the PS rules apply to the contract, not to your Limited Co.

      Comment


        #4
        Question is is it worth still running a LTD company? Bearing in mind the scale of the problem and all the unknowns this isn't really the most pressing question at the moment.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by supersteamer View Post
          Under the new PS rules there will be no 5% expense allowance for running your company.

          However, if caught by this, you are still running a Ltd company and you will still have legitimate business expenses (insurance, accountancy, filing fees, etc.). Presumably you will still be able to (and it would be advantageous to) pay for these through the LtdCo using retained profit from previous years?

          (And in that case, in the first year at least, would this potentially result in a trading loss which you can then carry back to get a small corporation tax refund?)
          Sure, it's just a withholding tax, not a more general change. You'll need to reconcile the differences between the invoiced amounts and the payments received as a withholding tax, and then receive full relief on any distributions to yourself (whether as salary or dividends), resolving any discrepancies at year end (in your SATR). That said, I'm not sure how you'd arrive at a trading loss if you're still actively trading (and if you're not actively trading, how you'll justify business expenses or why you aren't closing the company). Of course, the details will be forthcoming with regard to the precise operation of the withholding tax, but the changes have a defined scope.

          Comment


            #6
            What?

            What? There's a 5% expense allowance for running a Ltd Co? Why don't I know this?

            Guess it's too late now.

            Comment


              #7
              Originally posted by Lost It View Post
              What? There's a 5% expense allowance for running a Ltd Co? Why don't I know this?

              Guess it's too late now.
              There is............................if the contract is deemed within IR35.

              Feel you have missed out, now?
              The Chunt of Chunts.

              Comment


                #8
                Originally posted by Lost It View Post
                What? There's a 5% expense allowance for running a Ltd Co? Why don't I know this?

                Guess it's too late now.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  Originally posted by northernladuk View Post
                  And people are surprised by the view expressed in When I met chancellor Hammond after Autumn Statement 2016 :: Contractor UK
                  merely at clientco for the entertainment

                  Comment


                    #10
                    Originally posted by eek View Post
                    And people are surprised by the view expressed in When I met chancellor Hammond after Autumn Statement 2016 :: Contractor UK
                    What did people think of the article written by our CEO?

                    Will be interesting to see what detail is announced on the 5th.....

                    Comment

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