Choosing the right accountant

[malvolio]

Should my spouse (new director) join my existing ltd company for saving cost or setup her own new company in order not to get any hassle or attention from HMRC? Which one is the best tax efficiency if both of us are fee earner?

I am a bit confused that my current accountant advised me to let my spouse join my ltd company but another accountant suggested my spouse setting up a new ltd for not getting any hassle from HMRC if one of us does not work?

Not sure which way we should go. Any suggestions appreciated.

Who knows, in this post-Arctic world of mythical taxation. If she is a co-director and fee-earner and one of you is on the bench for a while, you might find the other one paying tax on your total dividend income as though it was their own. Separate things into two companies and exactly the same thing might happen, although this time because HMRC will ignore the two companies under the "connected persons" concept. Or neither may happen. Or something completely different.

Plus of course, it's already happening since the new rules are in effect from April 2008 and will be based on 2007 income, regardless of what they actually are.

Which is why the whole Income Splitting debacle is just that - a debacle of the first order. And why nobody knows what the hell to tell anyone.

[Nixon Williams]

Should my spouse (new director) join my existing ltd company for saving cost or setup her own new company in order not to get any hassle or attention from HMRC? Which one is the best tax efficiency if both of us are fee earner?

I am a bit confused that my current accountant advised me to let my spouse join my ltd company but another accountant suggested my spouse setting up a new ltd for not getting any hassle from HMRC if one of us does not work?

Not sure which way we should go. Any suggestions appreciated.

My general advice would be to have separate companies.

The proposed rules on "income shifting" will have an impact on company set ups with two working spouses, and there will be added confusion when one of yoiu ceases working through it, or one dramatically changes their earnings.

The additional costs of having another company is not much greater although this depends on what your accountant charges.

I hope this helps.

Alan

[Bluebird]

My general advice would be to have separate companies.

The proposed rules on "income shifting" will have an impact on company set ups with two working spouses, and there will be added confusion when one of yoiu ceases working through it, or one dramatically changes their earnings.

The additional costs of having another company is not much greater although this depends on what your accountant charges.

I hope this helps.

Alan

should also be interesting if Mrs Own-Co's ltd co provides services to Mr Own-Co's ltd co in the form of accountancy services or admin support [ or the other way around ] - could be that Mr Own-Co actually ends up paying income tax on money that he has paid out !!!

[clwd]

Thanks for replies!

If I decide to go permie and transfer all shares to my spouse in my ltd company once she has got her new contract, will my company still get any hassle from HMRC? It means that she will become the only one director in my Ltd company if I resign. I know it sounds complicated. At least, we can save some money to setup another new ltd.

Actually, I am not sure that it is a wise way to do if I sell my company to her rather than closing it. or I just close my company and let her setup a new ltd if I go back to permie. Any comments?

[Bluebird]

Thanks for replies!

If I decide to go permie and transfer all shares to my spouse in my ltd company once she has got her new contract, will my company still get any hassle from HMRC? It means that she will become the only one director in my Ltd company if I resign. I know it sounds complicated. At least, we can save some money to setup another new ltd.

Actually, I am not sure that it is a wise way to do if I sell my company to her rather than closing it. or I just close my company and let her setup a new ltd if I go back to permie. Any comments?

you can set up a new ltd co for about £30...

[malvolio]

Thanks for replies!

If I decide to go permie and transfer all shares to my spouse in my ltd company once she has got her new contract, will my company still get any hassle from HMRC? It means that she will become the only one director in my Ltd company if I resign. I know it sounds complicated. At least, we can save some money to setup another new ltd.

Actually, I am not sure that it is a wise way to do if I sell my company to her rather than closing it. or I just close my company and let her setup a new ltd if I go back to permie. Any comments?

Don't, it won't work. The only safe way is to have your own company and a 100% shareholding - any other variation will attract some kind of threat from HMRC. And when all else fails, there's always IR35...

The whole point is that they do not see us as having businesses for any other reason than to save tax. They ignore the long list of extra costs and missed benefits we fund for ourselves. They also ignore their own damn silly law - S134c as was - that's makes us have LtdCos in the first place and not work as sole traders.

[bflpm]

Choosing an Accountant

Have been with SJD for a couple of year now and they have been getting steadily worse at responding to communications and providing information in time.

There are several issue with them but suffice to say I am now looking for a new account

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Looking for new accountant

Have been with SJD for a couple of year now and they have been getting steadily worse at responding to communications and providing information in time.

There are several issue with them but suffice to say I am now looking for a new account

[balaplus]

What if the contract rates for my spouse are not significant? Would having my spouse on PAYE (no shareholding) in my limited company make more sense than the umbrella route? Much less to pay to the accountant than umbrella I woul imagine.

[Bluebird]

What if the contract rates for my spouse are not significant? Would having my spouse on PAYE (no shareholding) in my limited company make more sense than the umbrella route? Much less to pay to the accountant than umbrella I woul imagine.

Yes, that would make a lot of sense, however you would need to ensure that the contracts are ok.

Some clients may not want to deal this way for temp workers...