Originally posted by hugebrain
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I would suggest you get confirmation from your chosen provider, but it is the "purposes of trade" caveat which might cause a problem. If you try a search there was quite a lot of debate a few months ago and some fairly informed contributions. -
£215k is the current annual allowance or 100% of salary whichever is the lower. AAnd yes, you can make the contribution through the company but this will not necessarily be an allowable business expense - this decision rests with the Local Inspector of Taxes.Originally posted by THEPUMA
It's to do with the contribution being "wholey and exclusively for the purpose of the trade or business" and if you pay yourself £10K pa and try and put a pension contribution through for, say £100k and expect Corp relief on it, it just isn't going to happen. There has been some recent clarification on this from HMRC which basically says company contribs are more flexible than personal contribs but don't take the p*ss.
Lowere Earnings Limit is £84pw. NI contribs start at £97 pw. If you're paying between this you get full credit for state pension. Ther is a white paper being looked at as we speak which is considering dropping the number of yrs contribs req'd for full state psn down to 30, so if you're concerned about any shortfall i would recommend holding fire about topping up until this has been finalised.Comment
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Do you mean between yourself and your ltd ?Originally posted by WHAComment
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i dont have no contract between me and my companyKeep it clean!!!Comment
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I just upped my salary to NMW from £97pw to take the TLC35 insurance from QDOS. I'm not on the best of contracts so it makes commercial sense. I'll lower it again when expedient to do so....my quagmire of greed....my cesspit of laziness and unfairness....all I am doing is sticking two fingers up at nurses, doctors and other hard working employed professionals...
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Nmw
Interesting debate.
As a firm we recommend paying the NMW just to be on the safe side. Yes, it costs more tax and NI, but there is also something to be said for peace of mind.
At the moment, whilst it is generally accepted that the NMW cannot apply to directors without a contract, this is only opinion - it has not been tested.
With our friend Gordon on the look out for ever more ways to raise tax it would not be a great leap to suggest he might try to impose the NMW on one man Ltd Cos. If you do the maths, take say 100,000 contractors by £1000 a year over say 3 years makes £300m.
Of course, if you want to maximise income and you accept the risk as above then yes, pay the bare minimum for NI purposes.
The size of salary has absolutely no impact on whether a contractor will be investigated. We had a contractor who was paying under IR35 and they still investigated him!P.S. What Spreadsheet? Revolutionising the contracting market again.Comment
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Do you happen to know what the 'Premium' is they ask for if you pay yourself less than 205pw? I think going for £205 is the safest bet - I plan to do this when I move from Giant shortly. It's just a massive unknown to take out of the equation. What's more interesting is on their IR35TLC quesitonaire they ask the question 'If your salary is less than 10k then please give the reason'. From this point of view also, what are you meant to say other than 'I want to pay less tax and NI!' Surely that would be a really big red flag to Norm if you got investigated.Originally posted by LockhouseComment
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Most of the arguments against 97pw seems to stem from this notion that HMRC wouldn't regard that as a fair market salary for the work you do.
How does £10k pa seem 'fair'.
Surely if you/your accountant uses this argument then you should be paying yourself somewhere upwards of £40k.Si posse, recte, si non, quocumque modo remComment
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This is one of the myths I am trying to explode. There is no notion of fairness in the Taxes Acts.
Can you imagine a courtroom scenario where an HMRC barrister used the line of argument that "He's not paying himself enough. It's not fair."?Comment
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