I've done a bit of research on this, but thought this would be a good place to get some answers to a few queries on my mind.
I switched to an umbrella at the start of this year (due to IR35) so thinking of closing down my ltd company as I don't foresee any future use of it for the next few years.
After I file and pay my liabilities this year (Corporation Tax), I think I will have about 40-45k in cash / retained profits. I've heard the most effective way is to do a MVL and entrepreneur relief. A few questions:
1. I read that you have to be an employee of the ltd company to claim ER (I also own 100% of capital and voting rights in the ltd company). I've been paying myself via PAYE and dividends prior to switching to umbrella. I've recently filed an EPS for the months I didn't pay myself and when I called HMRC they advised that I submit a p45 for myself and submit a final submissions for this tax year (after 31st March 2021) so I won't have to continue to file. Does this still make me an employee even though I took myself off payroll with the p45, or do I need to add myself back on?
2. With regards the ER, I hear the tax take is 10%. Do you pay this tax bill via self assessment in the same way that you pay tax on dividends?
3. Dividend tax is tax free up to £2k. Am I allowed to pay myself that once the FY 21/22 kicks in, and then proceed with the MVL and entrepreneur relief? (as I've heard that the MVL can take up to 7-9 months?)
Thanks in advance
I switched to an umbrella at the start of this year (due to IR35) so thinking of closing down my ltd company as I don't foresee any future use of it for the next few years.
After I file and pay my liabilities this year (Corporation Tax), I think I will have about 40-45k in cash / retained profits. I've heard the most effective way is to do a MVL and entrepreneur relief. A few questions:
1. I read that you have to be an employee of the ltd company to claim ER (I also own 100% of capital and voting rights in the ltd company). I've been paying myself via PAYE and dividends prior to switching to umbrella. I've recently filed an EPS for the months I didn't pay myself and when I called HMRC they advised that I submit a p45 for myself and submit a final submissions for this tax year (after 31st March 2021) so I won't have to continue to file. Does this still make me an employee even though I took myself off payroll with the p45, or do I need to add myself back on?
2. With regards the ER, I hear the tax take is 10%. Do you pay this tax bill via self assessment in the same way that you pay tax on dividends?
3. Dividend tax is tax free up to £2k. Am I allowed to pay myself that once the FY 21/22 kicks in, and then proceed with the MVL and entrepreneur relief? (as I've heard that the MVL can take up to 7-9 months?)
Thanks in advance
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