I always knew we were right....

[malvolio]

I deliberately use a limited company so that I control where the gross income is used. In my case, to provide a consistent monthly salary to pay the bills, manage my pension planning, control my recovery of business expenses and be immune from a range of pointless EU laws about minimum wage and working hours. I don't set the taxation law for limited companies, but equally I'm not going to ignore them either.

I also have occasional income from sources outside my main contracts that all go to the same general pot of money.

Also I don't use an umbrella mainly because I don't plan to work 12 months a year and need the flexibility and control that MyCo provides that an umbrella can't. I would be Schedule D self-employed by choice, but I can't be, or I could become a PAYE agency temp which is an even worse option than being tied to an umbrella.

So MyCo has a clear business rationale. I don't avoid any taxes and do of course pay all that are due as soon as they are due.

[BrilloPad]

To reduce risk again by minimising company costs and ensure money remains for rainy days when the market isn't so good

or to profit from the risk involved due to working the way I do which adds additional risk to income which would not be the case if I was an employee.

I tried to reduce risk by minimising company costs. Fat lot of good it did me.

[eek]

I tried to reduce risk by minimising company costs. Fat lot of good it did me.

You missed the previous comment where I states that I don't let money out of my own control.

[BrilloPad]

You missed the previous comment where I states that I don't let money out of my own control.

I don't let my money out of my control either. In fact I made it more controllable. Fat lot of good it did me.

[BrilloPad]

I deliberately use a limited company so that I control where the gross income is used. In my case, to provide a consistent monthly salary to pay the bills, manage my pension planning, control my recovery of business expenses and be immune from a range of pointless EU laws about minimum wage and working hours. I don't set the taxation law for limited companies, but equally I'm not going to ignore them either.

I also have occasional income from sources outside my main contracts that all go to the same general pot of money.

Also I don't use an umbrella mainly because I don't plan to work 12 months a year and need the flexibility and control that MyCo provides that an umbrella can't. I would be Schedule D self-employed by choice, but I can't be, or I could become a PAYE agency temp which is an even worse option than being tied to an umbrella.

So MyCo has a clear business rationale. I don't avoid any taxes and do of course pay all that are due as soon as they are due.

You can pay your other sources of money into an umbrella company. And alot of workers don't work 12 months a year e.g. those who change jobs. It all comes out in the wash at the end of the day.

You should be IR35 caught - if not by the letter of the tax law then by the spirit. But you are evading (I mean evading not avoiding) IR35 by hiding behind a loophole.

[normalbloke]

To reduce risk again by minimising company costs and ensure money remains for rainy days when the market isn't so good

or to profit from the risk involved due to method of working which adds additional potential risk to income which would not be the case if I was an employee.

So if you 'minimise company costs' by tax avoidance, that's ok? Duty bound to your shareholders to do that (and to whom most contractors income shift as well, the other shareholder being spouse/partner).

Glad that's sorted.

[eek]

I don't let my money out of my control either. In fact I made it more controllable. Fat lot of good it did me.

Doesn't a partnership introduce another person (or persons) into the control mechanism. That would fail the very first part of my rule.

[eek]

So if you 'minimise company costs' by tax avoidance, that's ok? Duty bound to your shareholders to do that (and to whom most contractors income shift as well, the other shareholder being spouse/partner).

Glad that's sorted.

Avoidance is legal. income sharing is fine as you spouse is sharing the risk inherent within your working practices. The highest court in the land agreed it was fine and no government has tried to change the rules since

[normalbloke]

Avoidance is legal. income sharing is fine as you spouse is sharing the risk inherent within your working practices. The highest court in the land agreed it was fine and no government has tried to change the rules since

Agreed that tax avoidance is legal. Scheme users would agree. May not be 'right' of course, but its legal.

".. no government has tried to change the rules since .." For since substitute 'yet'. Doesn't mean they won't have another go though.

And whilst Malvolio seems to have a robust business model, I bet 90% of the contractors on this forum don't have anything resembling that. And I bet their spouses don't share any risk in their business either.

[AtW]

So what is your setup - full PAYE or salary/dividends? One could argue that the latter is a similarly artificial setup for most of the posters on this site.

The company that I've founded employs over 10 people now mainly on PAYE, this includes myself with appropriate salary (not minimum wage).

There are dividends but there is corp tax paid on profits.

It's all, in my view, exactly as the Parliament intended - there are no tricks and no artificial arrangements solely designed to reduce taxes which are very substantial.

If the Parliament decides in the future to put NI on dividends then so be it - I won't be changing the structure because it was not intended for tax avoidance in the first place.