New Contractor Help

[northernladuk]

^^ this. If you listen to no other advice, at least listen to this.

Technically NONE of the company's money is his until its distributed properly?

[Cirrus]

I've added my wife who doesnt work as a director. Can I just pay her dividends as shes a shareholder and director, can I also use her personal tax allowance to pay her salary if she does some work

I don't do this but I would say you probably can although you take a risk, but that's a true of non-IR35 contracting as a whole

Does salary have to be taken monthly or can as long as i pay myself £8060 over a year that my nat ins wont be hit

You can pay yourself as you like, It's not 'salary'; it's taxable income.

Can i stall paying expenses back till next tax year for self ass so i can utilise my tax allowance and pay less salary next year and pay myself back in expenses

I am coming to the end of the year, and as Ive just started trading and been out of work am will be know where near my tax threshold so whats the best way of utulising this? Am I able to crowbar any further payments in this years self assessment instead of next year,

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You can pay yourself what you like. You don't need to 'crowbar' anything or fiddle with delaying expenses. If you're thinking you can only pay yourself with money the company has earned then you need to realise lots of businesses make losses. You're just not allowed to persistently make a loss. So pay yourself up to your tax optimised limit. It will come off your Corporation Tax so you probably can carry the loss forward to reduce next year's CT

[Lance]

You can pay yourself what you like. You don't need to 'crowbar' anything or fiddle with delaying expenses. If you're thinking you can only pay yourself with money the company has earned then you need to realise lots of businesses make losses. You're just not allowed to persistently make a loss. So pay yourself up to your tax optimised limit. It will come off your Corporation Tax so you probably can carry the loss forward to reduce next year's CT

Yes you can do this but be aware of what insolvency means and the fact that it's illegal to trade if you are. Running a loss legally implies money being available, either as retained profit from a previous year or additional capital.

[Cirrus]

Yes you can do this but be aware of what insolvency means and the fact that it's illegal to trade if you are. Running a loss legally implies money being available, either as retained profit from a previous year or additional capital.

kwaboy just wants to juggle cashflows. If he was buying vast quantities of stuff on tick with no realistic hope of being able to pay for it eventually, then that is naughty. But contractors don't normally get into those situations. kwaboy is going to be borrowing from himself or the bank etc - everyday behaviour.

It's important to appreciate that your company structure is a big buffer that allows cash to roll in and out with only a loose relationship to invoices coming in, payments to directors, dividends etc. There are some constraints eg you can't provision pension payments (ie pay them after the end of the relevant tax period) but the main focus is building a snapshot at the point of submitting annual accounts. If the Revenue ever investigated you they may penalise you by recalculating your tax based on actual timings but normal people accept such risks.