paying 18% tax via limited company?

[rebeccaloos]

Re: Just a thought

no, you get 100% of net earnings! (by definition)
net = 80% of gross
|I

[partimer]

Re: Just a thought

Not that I disagree with anybody, you are entitled to run your business any way you see fit. I was hopefully pointing out that we are all eventually going to get a visit from the IR. I want it to be later (so I'll be retired) rather than sooner.

I think that P.Timer Ltd who pays the director 16k and the secretary 14k (which is what the IR pay their staff) will be behind Bradley Ltd, Loos Ltd, etc. (who pay <5k and 2K to their respect employees) in the queue at the IR office.

This is not necessarily true but what I'm willing to gamble on.
I may be actually at the front of the IR queue but even then as I've already stumped up most of it, there shouldn't be that much extra they can squeeze out of me.

Like I said, it's all a gamble. If you're already gambling with minimum wage, etc. Why not go all out and do director loans like the director at "Joe Bloggs" ...

Disclaimer:
These are all scenarios and has no relevance to anybody living or dead.

[Robot]

Putting your head above the parapet!

Just found this piece of Info from Hectors Inspection manual, I don't know how old this info is, but it may be relevant to the debate on low salary and dividends.


IM5322 - Accounts examination: use of service companies

When examining accounts, Inspectors should look out for attempts to avoid or delay payment of Schedule E tax and Class 1 NICs by means of arrangements under which directors or employees are remunerated for services provided typically by way of

a small wage or salary in order to meet the minimum wage requirements and pay the minimum amount of NICs necessary to qualify for benefits, and
large dividends.
The most common forms of this arrangement involve the use of a personal service company or a composite service company.

The individual gives to the personal service company the right to provide his/her services to a third party. The company may negotiate directly with a client or an agency may be included in the chain. The individual whose services are being provided may be a director or employee and shareholder of the company. In addition the individual's spouse is often a shareholder in order to minimise exposure to higher rates of tax.

[fiddleabout]

Re: Putting your head above the parapet!

They should also include the fact that this is in no way illegal.

Had they wanted to make it so they would have drafted legislation other than IR35 which merely muddies the waters and means the difference between 20% and 40% tax rests largely on a few clauses written on a bit of paper and the luck of the draw on whether any particular company is investigated.