Plan B turnover amount?

[MarillionFan]

Thanks, just made the same conclusion having calculated employers NI. So, at this point as there is no profit, there's no CT.

Think I complicated this by attempting to use low salary + divis, rather than full PAYE (although we won't do full PAYE in reality).

Off now to add in other expenses (in excel!).

Ta.

IT contracting site remember. No way was anyone going to give a simple answer.

[JamJarST]

CT is after expenses, including salary. So on the basis of the figures in my earlier post:

If you're looking at salary only, then you need a gross salary of £31,566 to get £24,000 after tax, assuming a normal tax code. That results in NI of £3,323. So £34,889 altogether.

That's £34,889 x 4 = £139,556.

Say you have a turnover of £150,000, then wages of £139,556, that's a profit of £10,444 on which you pay 20% CT of £2,089 to leave £8,355 retained profit. The retained profit is then the amount available for dividend.

So based on your figures if the OP just wants to break even, then £139556 would be the required turnover.

[Spoiler]

So salary costs = £36000 x 4 = £152000 per annum

Just realized: £36000 x 4 = £144,000 per annum on my calculator!

[MarillionFan]

Just realized: £36000 x 4 = £144,000 per annum on my calculator!

Bloody Lotus 123.

[Clare@InTouch]

So based on your figures if the OP just wants to break even, then £139556 would be the required turnover.

Exactly. Add on any other expenses like legal/professional fees, and that gives the required turnover to break even.

If he's wanting to pay dividends then he'd require a certain profit, and that would involve more convoluted calculations re CT.

[Contreras]

Yes, sorry. All directors are shareholders - 25% share.

What happens if one of the party puts in considerably more than 1/4 share of effort, or another wants to slack off for a while?

I know you can have different share categories and/or mess around with dividend waivers. It's basically using dividends as a NI-free remuneration tactic - when I looked at this some time ago I received conflicting advice, one accountant said no problem and another said don't go there.

[northernladuk]

Remember dividends are only paid out of profit as well. If you don't do well 4 of you don't get full (or expected) renumeration.....

[v8gaz]

Why is everyone confusing gross profit with turnover? We don't know what Plan B does - if its selling widgets with a 10% markup you can multiply that turnover by 10 to achieve suffieicnt profit to pay the wages. As others have said, check what sort of yurnover is achievable with a staff of 4, rather tha working out to pay the wages.

[Nixon Williams]

I would strongly recommend that you speak to your accountant before you do anything.

There are many issues that will need to be considered and if you get them wrong it could be quite costly.

Whilst you can get some ideas and pointers on here, please do speak to your accountant who should ask all the right questions and will be able to provide you with good advice.

Good luck with Plan B.

Alan

[Spoiler]

Whilst you can get some ideas and pointers on here, please do speak to your accountant who should ask all the right questions and will be able to provide you with good advice.

Trust me, we WILL be speaking to an accountant BEFORE making any decisions about plan B.

I just wanted to get some basic figures down to set expectations and have some idea when I speak to the accountant(s).