Originally posted by Maslins
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
MVL alternative?
Collapse
X
-
'CUK forum personality of 2011 - Winner - Yes really!!!! -
Originally posted by northernladuk View PostDoesn't the nature of his business change to an investment one as that's all it is doing year in year out which affects something or other?Comment
-
Originally posted by Maslins View PostCertainly no reason why you can't drip feed salary/dividends/pension contributions over several years. A few things to mention:
- for the salary/pension, you'll likely have no issue getting CT relief the first year or two, but if you continue for a while with no company income to offset these against, it will limit what further CT relief you can get.
I guess if you want to draw down money from LTD that is OK.
However wouldn't it be better to be on £52k salary with £40k salary sacrifice? This way you pay a bit of NICs, but get tax refund on the full £40k (incl. the tax free £12k). Or I am wrong?Comment
-
Originally posted by win10 View PostIf the company doesnt have any income in a particular year wouldn't company pension contributions be pointless for tax savings. It will be offset from the corp tax, but if no income, no profit (in fact there will be loss), no corp tax.
I guess if you want to draw down money from LTD that is OK.
However wouldn't it be better to be on £52k salary with £40k salary sacrifice? This way you pay a bit of NICs, but get tax refund on the full £40k (incl. the tax free £12k). Or I am wrong?merely at clientco for the entertainmentComment
-
Originally posted by eek View PostI think you are demonstrating there that you don't know how salary sacrifice actually works.
Explain then.Comment
-
Originally posted by win10 View PostWhy?
Explain then.merely at clientco for the entertainmentComment
-
Originally posted by eek View PostI think you are demonstrating there that you don't know how salary sacrifice actually works.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
-
Originally posted by spindrift View PostIs there a legal reason why I cannot run the business for several more years and continue to pay myself salary, dividends (*capped at base-rate) and expense pension contributions while having no turnover?
Well, my accountant said I shouldn't be drawing a salary if the company isn't trading i.e. company has no revenue due to me being out of contract.
I'll be interested to see what the comments in this thread have to say about it.Comment
-
MVL alternative?
Originally posted by rascal View PostPeople here are always saying speak to your accountant.
Well, my accountant said I shouldn't be drawing a salary if the company isn't trading i.e. company has no revenue due to me being out of contract.
I'll be interested to see what the comments in this thread have to say about it.
Sounds like you need a new accountant. Or you need to provide the relevant details that he used to provide that advice.
Paying a salary makes the company trading in any case. So what makes you think it’s not trading? Just having no revenue right now is not the same as “not trading”. For a start I only invoice every 4 weeks and that doesn’t make me not trading for the 3 intervening weeks.Last edited by Lance; 1 December 2020, 18:32.See You Next TuesdayComment
-
Originally posted by Lance View PostOr you need to provide the relevant details that he used to provide that advice.
They also advised that an employer pension contribution could not exceed operating profit in the year the contribution was made, otherwise the excess would be disallowed for corporation tax.
So if the OP was using the same accountant as myself, they would presumably be advised that they should not take a salary, would not be able to make employer pension contributions (as there would be no operating profit), but could continue taking dividends (which come from retained profit).Comment
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Comment