How Do you have your Ltd Co. Setup?

**Sockpuppet** · 7 January 2007, 14:36

Eh? How can you have "costs" of £500 each month. Surely costs are costs and they can change. Seems like he is trying to get you a small grey room.

Also dividends can only be taken from profit so you are going to pay the 10% on them before you take them out anyway.

The "best" setup is usuall always.

Bill whatever (become VAT registered - flat rate VAT)

Salary of £5035 / year.

Pay corp on the rest (claim for everything as expeneses though - only legal expenses).

Take the rest as dividends.

**Maxamus** · 7 January 2007, 14:40

Originally posted by Sockpuppet

Eh? How can you have "costs" of £500 each month. Surely costs are costs and they can change. Seems like he is trying to get you a small grey room.

I did say he suggested the following as an "example" and not actual.

I have a meeting with them tomorrow to get the company setup but through email correspondance and phone conversations he gave me the above as an example.

Originally posted by Sockpuppet

Pay corp on the rest (claim for everything as expeneses though - only legal

what do you mean claim for the rest as expences?
Im approximating my expences a month will be circa £700-800

**Waldorf** · 7 January 2007, 15:08

What is the point of leaving the funds in the company? You might as well take what you can unless you are planning a year off etc.

I would take as much as I can now!

**_V_** · 7 January 2007, 15:24

Originally posted by Waldorf

What is the point of leaving the funds in the company? You might as well take what you can unless you are planning a year off etc.

I would take as much as I can now!

Run the company for 2+ years and then close it down. Profit is subject to capital gains tax, but you get a lot of taper relief, so a lot of money in your pocket. Since it is a capital gain it does not attract income tax.

Ask your accountant.

**VectraMan** · 7 January 2007, 16:53

This doesn't need to be cast in stone or "set up". You can be pretty flexible about what you pay as dividends as long as you stay within what's legal. Leave the money in the company and then pay yourself a whopping dividend if and when you're ready to buy a house. What V says is the most tax efficient way, but if you need the money and the funds are available, take it when you want.

I've only paid myself about £18K this year (i.e. since April), sticking to the minimum I needed, but will probably pay the other £18K (or whatever it is) in the next couple of months to make the most of my personal allowance, and leave the rest in the company for a while. I like the idea of the company having money as it means I continue to get an income if I can't find work.

**TheFaQQer** · 7 January 2007, 17:18

I pay myself minimum wage (just over £10k a year), and will take dividends to take me up to (but not beyond) the 40% threshold. Slap the dividend payment straight into my offset mortgage, and then draw against that as the year goes on, as necessary.

Am waiting for my end of year accounts to be drawn up, and then I'll know how much I can take now - bearing in mind that you can only take dividends out of profit.

One thing I am looking to discuss with my accountant is doing the dividend paperwork for as much as I can take, even if the company cash flow doesn't have the money available there. Then only take the money from the company once the cash flow allows it. That way I maximise the dividend payment this year, even if I don't actually see the cash.

Any thoughts?

**Gonzo** · 7 January 2007, 17:26

Originally posted by TheFaqqer

One thing I am looking to discuss with my accountant is doing the dividend paperwork for as much as I can take, even if the company cash flow doesn't have the money available there. Then only take the money from the company once the cash flow allows it. That way I maximise the dividend payment this year, even if I don't actually see the cash.

Any thoughts?

One. Why would you do this?

You can declare a dividend if there is profit in the company. If there isn't then you can't.

The dividend paperwork is hardly difficult - unless I am doing it wrong!

**Maxamus** · 7 January 2007, 17:27

Originally posted by TheFaqqer

I pay myself minimum wage (just over £10k a year), and will take dividends to take me up to (but not beyond) the 40% threshold. Slap the dividend payment straight into my offset mortgage, and then draw against that as the year goes on, as necessary.

Any thoughts?

I like this idea.
So you take out the minimum salary and pay yourself some of the remaining funds as divident (upto but not beyond the 40% threshold). You keep the remainder in the company?

Sorry but im new to all this

**TheFaQQer** · 7 January 2007, 18:23

Originally posted by Gonzo

One. Why would you do this?

You can declare a dividend if there is profit in the company. If there isn't then you can't.

The dividend paperwork is hardly difficult - unless I am doing it wrong!

Dividends can only be paid out of profit. Taking this to the extreme, you shouldn't really be paying out any dividends until you know what the company profits will be for the year. Even if the company hasn't got the cash to pay it out, I can do the dividend paperwork and take the money once the cash flow improves.

How Do you have your Ltd Co. Setup?