Using Dividends

[hgllgh]

You will be fine, Im sure. If you are out of the country for several months after the shutdown, you can just tell the tax man you had a change of heart whilst sat on the beach, and that the contractors life IS for you afterall. I have done exactly this before, and I know several contractors who have done the same.

ok, well that sounds good... and I might be gone longer than several months so it sounds fair enough. I am just thinking (with my devils advocate cap on) that hmrc will ignore any good intentions and come after me anyway! But, I suppose even if they do I would pay another 8% on top of the 10% already paid... not ideal but better than paying higher rate div/income tax right?

[THEPUMA]

ok, well that sounds good... and I might be gone longer than several months so it sounds fair enough. I am just thinking (with my devils advocate cap on) that hmrc will ignore any good intentions and come after me anyway! But, I suppose even if they do I would pay another 8% on top of the 10% already paid... not ideal but better than paying higher rate div/income tax right?

no they'll try and top it up to 25% on the lot as opposed to 10% on the balance after your exempt amount.

[THEPUMA]

I am intrigued as to how this could work without flagging up as fraud??

You have to have a very good accountant or, failing that, us!

[hgllgh]

no they'll try and top it up to 25% on the lot as opposed to 10% on the balance after your exempt amount.

How come? If I was paying normal CGT it would be 18% so where does 25% come from?

[THEPUMA]

How come? If I was paying normal CGT it would be 18% so where does 25% come from?

The point is that if you close down and start back up again, then HMRC may argue that the proceeds cannot be treated as a capital gain at all. They have to be treated as dividends.

[SandyDown]

You can withdraw extra money from the company's accounts and still make it as a loss and not as salary to yourself by:
1- giving gifts, you are allowed to give a 3K to each child
2- director's loan
3-Say you want to put a substantial amount into pension
4- If you have a car sell your car to your company
5- open a subsidiary company transfer funds into it, you can sell your house to that company and hence pay the mort age that way (legitimate company expenses) but be warned this way you have capital gains implications.


Oh don't worry about income shifting, its been rejected for this year, and don't believe it would come into force (even if it did, they wont back-date it)