SJD v NW advice = confusion

[Clare@InTouch]

Last month SJD advised me to setup my limited with a 70/30 share split between myself and Mrs. Cr1spy.

Is this advice given by each accountants personal preference? Or is there a difference between initial setup share distribution and post creation share issuing?

They may also be considering other income. If your wife earns a salary elsewhere then paying her lower dividends would make sense in order to make the best of both tax bandings.

[Wanderer]

Last month SJD advised me to setup my limited with a 70/30 share split between myself and Mrs. Cr1spy.

As Clare says, it depends on your personal circumstances.

My advice is that if you and the wife have no other income then pay a £7k salary each (say that the wife is paid for secretarial, personal assistant, bookkeeping and "research" work) and do a 50/50 share split for dividends.

If your Mrs has an income of more than £7k then you might want to look at an uneven share split otherwise you could keep yourself below the 40% tax but she may be pushed into it because of other earnings (or vice versa).

Give the accountant a prediction of your turnover for the year, summary of other income for yourself/wife and get them to show a detailed example of what salary and dividend split they recommend, how much tax you would pay and why they are recommending that split/salary.

[Alan @ BroomeAffinity]

My advice is that if you and the wife have no other income then pay a £7k salary each (say that the wife is paid for secretarial, personal assistant, bookkeeping and "research" work).

What, even if she doesn't? That's tax evasion and HMRC will see through i right away.

[Joxer]

4. Make sure your working practises on each contract are outside IR35 and keep evidence to prove it

Interesting point raised Sue Ellen, could you offer a few examples of the types of evidence that would be useful in this scenario?

[northernladuk]

Interesting point raised Sue Ellen, could you offer a few examples of the types of evidence that would be useful in this scenario?

Keep your own records of things you do instead of using the clients procedures. Your own expenses, try and pay for everything and invoice it back, flight itineries sent to your Ltd not client, documentation that specifically mentions nice IR35 friendly stuff that shows you not under client direction. Things like mails advising your client you will be unavailable for certain days instead of asking the client if it is ok to have a day off.

[northernladuk]

What, even if she doesn't? That's tax evasion and HMRC will see through i right away.

Agreed. I saw in a thread the other day some guidelines about how much you can pay for bookkeeping services and common sense tells you it won't be 7k a year. Wish I had kept it. If you are going to pay her 7k make sure you can evidence every minute of it because when they come and look at you they will ask for proof. If not it is pure fraud.

People assume far too often this giving 7k a year is defacto standard with little or no comeback and it isn't.

[psychocandy]

Keep your own records of things you do instead of using the clients procedures. Your own expenses, try and pay for everything and invoice it back, flight itineries sent to your Ltd not client, documentation that specifically mentions nice IR35 friendly stuff that shows you not under client direction. Things like mails advising your client you will be unavailable for certain days instead of asking the client if it is ok to have a day off.

Difficult one the leave thing. Surely its common courtesy to ask if a certain date is going to prolematic rather than just tell them you wont be there? I agree doing something dull like filling in a request form is not cool.

[northernladuk]

Difficult one the leave thing. Surely its common courtesy to ask if a certain date is going to prolematic rather than just tell them you wont be there? I agree doing something dull like filling in a request form is not cool.

The wording of mails is super pedantic I know but if it helps and causes no problems I would rather do it this way. My client here is pretty versed in contractor ways and is happy to accomodate. What I put in a mail is different to what I say to him. The courtesy for me is done during conversation, the mail is to back it up as evidence. You could add something on the end asking if this will be a problem to (whatever work you are doing). Asking if it will be problem could be argued to be different to asking him for permission.

Bear in mind the recent IR35 win was on some pretty fine details about client control I personally like to play the game on the safe side where it doesn't piss the client off. Others may think I am being to pedantic over non issues but that's their opinion.

[blacjac]

Difficult one the leave thing. Surely its common courtesy to ask if a certain date is going to prolematic rather than just tell them you wont be there? I agree doing something dull like filling in a request form is not cool.

The wording of mails is super pedantic I know but if it helps and causes no problems I would rather do it this way. My client here is pretty versed in contractor ways and is happy to accomodate. What I put in a mail is different to what I say to him. The courtesy for me is done during conversation, the mail is to back it up as evidence. You could add something on the end asking if this will be a problem to (whatever work you are doing). Asking if it will be problem could be argued to be different to asking him for permission.

Bear in mind the recent IR35 win was on some pretty fine details about client control I personally like to play the game on the safe side where it doesn't piss the client off. Others may think I am being to pedantic over non issues but that's their opinion.

I personally put something like...

"I am planning on taking x - y off as holiday, would this cause the project any problems?"


That way you are not asking permission, but giving the client the option to raise concerns with the dates.

[northernladuk]

I personally put something like...

"I am planning on taking x - y off as holiday, would this cause the project any problems?"


That way you are not asking permission, but giving the client the option to raise concerns with the dates.

You have just used the word I would bend over backwards not to use. Permie get holidays. When you are trying to prove you are an independant supplier the last thing I would want to do is use the word holiday. Shoot me for being a pedant but there you go.