Profits location

[PlazaCommerce]

The situation at current is that I pay myself a weekly wage of £100 (below NI threshold) and weekly dividends of £800. This leaves £300 in the business account each week which is more than enough to cover the corporation tax.

As I'm paying myself a salary that is lower than the NI threshold, why would I need to allocate funds for that?

I appreciate my questions might be a little dumb, however I've only just started contracting and although I'd like to do everything myself I'm still making the decision as to whether I NEED an accountant or not.

Basically, the more I learn about the process the better chance I'll have of deciding whether contracting is a long term option for me or whether going back into a perm position is the right thing.

At present, my expenses, insurance and NI contributions are £0 (insurance was paid for by myself before the business account was set up). I don't have any expenses as I walk to the office.

[malvolio]

The situation at current is that I pay myself a weekly wage of £100 (below NI threshold) and weekly dividends of £800. This leaves £300 in the business account each week which is more than enough to cover the corporation tax.

As I'm paying myself a salary that is lower than the NI threshold, why would I need to allocate funds for that?

I appreciate my questions might be a little dumb, however I've only just started contracting and although I'd like to do everything myself I'm still making the decision as to whether I NEED an accountant or not.

Basically, the more I learn about the process the better chance I'll have of deciding whether contracting is a long term option for me or whether going back into a perm position is the right thing.

At present, my expenses, insurance and NI contributions are £0 (insurance was paid for by myself before the business account was set up). I don't have any expenses as I walk to the office.

Believe me (and everyone else saying the same thing), you need an accountant. You don't know enough to understand the level of the problem you are facing. It's difficult to run a business with both fingers in your ears.

Or ignore us, wait till April and get a whole new world of problems.

As for long term contracting, well the signs ain't too good so far...

[badger7579]

Why are you asking these questions because you don’t appear to be listening to the good advice from previous posters?

[PlazaCommerce]

Believe me (and everyone else saying the same thing), you need an accountant. You don't know enough to understand the level of the problem you are facing. It's difficult to run a business with both fingers in your ears.

Or ignore us, wait till April and get a whole new world of problems.

As for long term contracting, well the signs ain't too good so far...

This is the reason I joined the forum, to ascertain whether I need an accountant or not.

It's fine for accountants, or people affiliated with accountants to simply say I need one but taking into account your last post I'm trying to figure out what implications there would be if I carry on the way I am.

As I stated, the salary I'm receiving (as director) is below the NI threshold and the rest I'm taking as dividends.

Every transaction, in or out from the company account is recorded and based on calculations I've made I currently have more than enough left in my company account to pay the corporation tax when it's due.

[Pondlife]

So you don't put ANY expenses through the company?

[TykeMerc]

I'm not affiliated in any way with an accountant other than I employ a firm to handle my accounts.

I've been in business close to 20 years now, while I've come across lots of accounting info and experience I prefer to pay a professional to give me advice, keep the books, prepare returns and generally make sure I don't make any damn silly mistakes. A bonus is that my income is as tax efficient as the rules reasonably allow.

I could undoubtedly manage without an accountant, but I prefer not to.

[Netraider]

I'm not affiliated in any way with an accountant other than I employ a firm to handle my accounts.

I've been in business close to 20 years now, while I've come across lots of accounting info and experience I prefer to pay a professional to give me advice, keep the books, prepare returns and generally make sure I don't make any damn silly mistakes. A bonus is that my income is as tax efficient as the rules reasonably allow.

I could undoubtedly manage without an accountant, but I prefer not to.

WHS

[Pondlife]

I'm not affiliated in any way with an accountant other than I employ a firm to handle my accounts.

I've been in business close to 20 years now, while I've come across lots of accounting info and experience I prefer to pay a professional to give me advice, keep the books, prepare returns and generally make sure I don't make any damn silly mistakes. A bonus is that my income is as tax efficient as the rules reasonably allow.

I could undoubtedly manage without an accountant, but I prefer not to.

WHS

And for about 1% of your company's turnover it's a waste of your precious free time to do otherwise IMHO.

[TykeMerc]

And for about 1% of your company's turnover it's a waste of your precious free time to do otherwise IMHO.

True, I do enough project accounting to not want to have to arse about with my company stuff in detail. Arguably if the accountants were to beggar something up badly then I've also got some comeback on their professional firm too.

For £90 per month (inc VAT) it's value for money to me.

[malvolio]

This is the reason I joined the forum, to ascertain whether I need an accountant or not.

It's fine for accountants, or people affiliated with accountants to simply say I need one but taking into account your last post I'm trying to figure out what implications there would be if I carry on the way I am.

As I stated, the salary I'm receiving (as director) is below the NI threshold and the rest I'm taking as dividends.

Every transaction, in or out from the company account is recorded and based on calculations I've made I currently have more than enough left in my company account to pay the corporation tax when it's due.

For one, I'm not an accountant nor am I affiliated to any.

Second I've explained some of the detail you need to be able to produce. For example, you saying something is a dividend is not enough, you have to have a board minute declaring a dividend, to whom its been paid, how much and how much tax credit it has accrued. Don't do that and your divi is actually salary, which rather buggers up your claim that NICs don't apply. And leaving that detail aside you pay PAYE on divis anyway.

And so on...

So how about we stop giving advice to someone who clearly doesn't need it and you carry on defrauding the taxman. 'Cos that's how he'll see it.