Need some advice

[newbusinessman]

Hi guys and girls, I am a new 'business man' and have a couple of questions. I have set up my own limited company to do contracting and am now deciding how to get things moving.

Based on your knowledge, how much will 400 per day result in as a monthly home income?

I read about paying in dividends to reduce the overall tax burden, how does one survive and pay a mortgage and go on vacation, etc, when all cash is tied up in dividends that are only paid once a year?

If I created a limited company, how do I register for VAT; I had a look at HMRC but am unsure if it is only Corporation Tax I need to register for.

Any tips on avoiding IR35?

I am sure these have all been answered a million times but if someone has the time to help me out, I would appreciate it.

Thanks a bunch!!

[jungleboogy]

I contract through a limited company and pay dividends monthly, there is no reason why you have to wait a year. I generally draw 3 payments in total each month, a nominal salary, monthly expenses incurred and a dividend based on the profits after all deductions, including corporation tax, VAT, pension etc.

I registered for the flat rate VAT scheme via my accountant, believe I completed a form that they sent to the HMRC on my behalf.

"If your company or organisation has taxable profits of up to £1.5 million, you must pay your Corporation Tax by the normal due date, which is nine months after the end of your Corporation Tax accounting period. For example, if your company's accounting period ends on 31 May, your Corporation Tax payment is due on or before 1 March the following year" (HMRC website).

I used 'Accountax Consulting' to review my contract for IR35. They provided a report outlining the changes I had to request and surprisingly the agency agreed ! The main changes were surrounding 1. substitution i.e. the ability to substitute myself for another of an equivalent skillset if required 2. Protection - I asked them to remove the notice period so they could let me go immediately, the less protection I have the better it is for IR35. 3. Adding details of the specific project I was being hired to deliver rather than a general reference to doing any task the hiring manager asked of me, or words to that effect !

Good luck,

Jungleboogy

[northernladuk]

Hi guys and girls, I am a new 'business man' and have a couple of questions. I have set up my own limited company to do contracting and am now deciding how to get things moving.

Based on your knowledge, how much will 400 per day result in as a monthly home income?

I read about paying in dividends to reduce the overall tax burden, how does one survive and pay a mortgage and go on vacation, etc, when all cash is tied up in dividends that are only paid once a year?

If I created a limited company, how do I register for VAT; I had a look at HMRC but am unsure if it is only Corporation Tax I need to register for.

Any tips on avoiding IR35?

I am sure these have all been answered a million times but if someone has the time to help me out, I would appreciate it.

Thanks a bunch!!

Not much of a 'business man' if you can't go and research the very basics of running a company yourself.

Read the links to the right hand side. They cover everything you have gotten wrong above in great details. Google is also your friend.

[psychocandy]

1.) Get an accountant
2.) Get an accountant
3.) Get an accountant

:-)

[Pondlife]

1.) Get an accountant
2.) Get an accountant
3.) Get an accountant

:-)

and you thought we were all picking on you before.

[SueEllen]

I am sure these have all been answered a million times but if someone has the time to help me out, I would appreciate it.

Thanks a bunch!!

We could answer all your questions but that wouldn't be helping you in the long run. I suggest you listen to northernladuk and psychocandy's advise.

Remember - Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime

BTW this site has a very good search facility. If that doesn't work Google - Basic Search Help

[Wanderer]

Based on your knowledge, how much will 400 per day result in as a monthly home income?

Depends if you are IR35 caught or not. Try the <removed> and see what numbers it comes up with.

Just for fun, I tried it and ball park monthly take home from a £400/day contract (based on a 44 week working year):

IR35 caught: £4000
Outside IR35: £5140
Income Splitting: £5775 (can only work if you have a spouse who doesn't have any other income)

Yes, that's a big difference. This is why you should get an accountant to advise you now - see this thread for a list of popular ones. Once you have specialist advice for your circumstances, come and run it by us and we'll tell you what we think of it. If you don't watch it you will be making mistakes that could cost you a lot of money in tax that you may be able to avoid.

[newbusinessman]

Not much of a 'business man'

No, I am not a business man, hence my name 'newbusinessman' - first time contracting so setting up my own company for it; not everyone is born with a corporation to run from daddys hard work.

Remember - Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime

hence the reason I was asking for those with experience in learning to fish.

thanks to everyone for all the valuable information posted, really useful.