Do I need to hire accountant on an ongoing basis for my simple case?

[code46]

Should work fine as long as your company income is kept separate from your investment / gambling income.

Would also second (third? fourth?) the previous advice about hiring someone who knows what they're doing - sounds like your situation is fairly complicated compared to the average Contractor.

Thanks, will follow the advice, but what make you think my case is even more complicated? You mean the partner thing or investment? (ISA and gambling are both tax free in UK so I don't see an issue with that).

Cheers,

[JonNorris@Crunch]

Thanks, will follow the advice, but what make you think my case is even more complicated? You mean the partner thing or investment? (ISA and gambling are both tax free in UK so I don't see an issue with that).

All of the above, really. Each element on its own may be manageable, but when you start stacking them up you suddenly end up with a little house of financial cards. That's when an accountant is your friend.

(I'm not an accountant by the way; feel free to ignore me)

[eek]

Thanks, will follow the advice, but what make you think my case is even more complicated? You mean the partner thing or investment? (ISA and gambling are both tax free in UK so I don't see an issue with that).

Cheers,

Not quite. If gambling is a regular source of significant income its taxable (obscure knowledge I discovered when arbing on Betfair back in the mid 00's).

[northernladuk]

Not quite. If gambling is a regular source of significant income its taxable (obscure knowledge I discovered when arbing on Betfair back in the mid 00's).

Hmm, I am not so sure about that. There is an issue arising if you are paid for appearances at poker tables then you could be liable to pay tax on the winnings or something like that. Just a guy sitting a poker table/slot machine doesn't have to pay. Depends on what you mean by gambling anyway. Horses/poker or on the markets etc spread betting.

[northernladuk]

If the OP is indeed only doing a few months contracting here and there then isn't he best going Umbrella? Wasn't it said Umbrella can be better for incomes of under £30k. Would be much much simpler and easier than running an LTD for 3 months.

Also bearing in mind the low figures why is the OP even bothering with the dividends to his partner. He won't reach his own tax bands without needing his partner?

[Scruff]

Sounds like the OP is not on UK passport and requires a visa/partner requires a visa, in order to secure ILR?

If I were the OP, I would not bother with a "local accountant", but would consult with a UK based Accountant, who specialises in Contractor Accounting, as well as an Immigration Attorney.

If it walks like a duck, looks like a duck and quacks like a duck...

[TheCyclingProgrammer]

Not quite. If gambling is a regular source of significant income its taxable (obscure knowledge I discovered when arbing on Betfair back in the mid 00's).

You could make regular winnings gambling as much as you like, it still won't be taxable. Gambling as a trade is only taxable if you are facilitating it (eg running a casino or bookmakers) or making money from other services related to it (eg pro poker player earning a TV appearance fee).

Gambling itself does not constitute a taxable trade.

Caveat: there might be some things that HMRC do not consider to be gambling even though they appear to be.

[code46]

Well you kinda answered your own question mentioning family members or relatives. Your partner is neither. You are just using her to get money out of the company and gain a tax advantage. There are 100's of posts on here about. Try a search for settlements, wife shares, gifting shares. It's a moot point with a wife let alone a partner. Have a look at the S660 links on the right hand side but it's pretty complicated. Bottom line though is you can't do it with your partner.

Thanks. Searched and read a few threads, many of them are about gifting spouse/partners the shares but not about establishing the company with shares split at the beginning, but I guess it's the same?

Also, I had the impression was because I previous saw a tons of books/articles advertise this spouses 50:50 scheme. I guess the difference which I didn't take into account before was, they might be talking about normal company (such as retail) so that your spouse might actually act as (or at least appear to be) a business partner running the whole business with you from day one, while in a contractor company it's quite clear that you are the one doing the work and your spouse is hardly justifiable as a crucial part of the business. Is that the root cause? otherwise I don't see why the law should stop a partner to hold shares as an initial founder of the company given if he/she invest money in and indeed run a retail business together with you.

[TheFaQQer]

Thanks. Searched and read a few threads, many of them are about gifting spouse/partners the shares but not about establishing the company with shares split at the beginning, but I guess it's the same?

Also, I had the impression was because I previous saw a tons of books/articles advertise this spouses 50:50 scheme. I guess the difference which I didn't take into account before was, they might be talking about normal company (such as retail) so that your spouse might actually act as (or at least appear to be) a business partner running the whole business with you from day one, while in a contractor company it's quite clear that you are the one doing the work and your spouse is hardly justifiable as a crucial part of the business. Is that the root cause? otherwise I don't see why the law should stop a partner to hold shares as an initial founder of the company given if he/she invest money in and indeed run a retail business together with you.

What investment is your partner going to be making in setting up the company? Your initial outlay, as a guess is going to be a maximum of £5k. If they own half the company, they would be expected to put up £2.5k. And in return for this "investment", you are going to give away 50% of the company.

So, you are giving away a significant percentage of your future earnings to someone for a very limited investment. There is nothing to stop you doing that - you could give / sell that kind of stake to anyone you want to - find someone random to sell it to and you're fine. The problem comes from the perception that the income that they derive from that share can return to you, which means that you may have avoided paying tax on what would have been due if you had remained 100% owner of the business. It becomes difficult to prove that you haven't received any benefit from the money (particularly if you have a joint bank account).

Two more things to consider. Firstly, as NLUK says, at the level you are talking about, is there any financial benefit in having a split ownership? Secondly, what happens if you separate - she now has half the company and rights to half the dividends that you declare from now on.

[code46]

If the OP is indeed only doing a few months contracting here and there then isn't he best going Umbrella? Wasn't it said Umbrella can be better for incomes of under £30k. Would be much much simpler and easier than running an LTD for 3 months.

Yes, with the helpful discussion here, I'm indeed reconsidering umbrella company again. Though I had made some point it's not only about tax so I'll need another thought.

Also I didn't remember I said it was exact 3 month (maybe I used just 3 months as an example in some posts).

Also bearing in mind the low figures why is the OP even bothering with the dividends to his partner. He won't reach his own tax bands without needing his partner?

Yes, but it's only saying I don't have to depends on the contracting work income to cover my daily living cost. The client wants to hire me as long as possible, at least for the recent one year or two, but I don't want to work full time/year for them at least. That's the reason why they have to hire me as contractor, because it's difficult for them to hire permanent employee with that flexibility.

So I might work more months in the end, it up for negotiation. As I don't need the money immediately and I can just let the money sit on the company account (if I have one) and extract them gradually using my annual allowance if I no longer work as contractor in following years. Still it's always better to move money out to my personal account given if the cost is low and doesn't break any regulation. I hope that makes sense.