Official Summer 2015 Budget Thread

[TheCyclingProgrammer]

If you make the spouse a director, it is easier to justify a higher salary.

Or Co. Sec. If your spouse is a shareholder then she probably ought to be one of those two things anyway.

[DaveB]

If you make the spouse a director, it is easier to justify a higher salary.

No it isn't. You still have to show that the salary paid is an accurate reflection of the value of the work done.

Just being a director does not automatically infer some sort of value associated with the title.

[AtW]

As with IR35, the devil will be in the detail.

Expect the worst, then you won't be disappointed.

It would be (certainly after they adjust dividend rates in the future upwards) more or less the same as Income Tax + NICs (employee and employer). That's their objective and since they could not put NICs onto dividends they just nuked totally sensible tax credit which surely was less than actual amount of corp tax paid.

[tractor]

...

Thanks, but I think this is what I was referring to:

Exactly but once you understand the principle, it becomes easier to apply it across the two bands.

[TheCyclingProgrammer]

Just being a director does not automatically infer some sort of value associated with the title.

That's a matter of opinion. Some would argue that the legal responsibilities involved with being a director carry some value worth remunerating.

[DaveB]

Or Co. Sec. If your spouse is a shareholder then she probably ought to be one of those two things anyway.

No, there is no connection between being a shareholder in a company and holding a position with that company. The two are completely seperate.

[expat]

Looks to me like all the exits are being blocked.

[expat]

I notice as a minor curiosity that the chancellor quoted 2 people in his support in his speech: Ed Balls and Alastair Darling.

[centurian]

It would be nuts for it to affect ltds. Arguably even many brolly contractors.

Day rates would have to shoot up overnight, or the workforce will collapse as so many people travel so far to work on contracts.

Day rates only need to rise if every contractor claims large T&S - not all do.

This just means those with low/zero T&S will now have a competitive advantage and will clean up all the available contracts.

[WordIsBond]

Also things to think about how it affects those who have a spouse/partner/whoever as a company shareholder. Will the £5k dividend allowance apply irrespective of you other income? If your only income is dividend income, will you still get taxed at 7.5% on dividends between £5-10k even if within the personal allowance threshold, or can you actually earn £15k (personal allowance + dividend allowance) before paying any tax?

Statement
Top of page 45, 1.187:

Combined with the increases the government has made to the personal allowance and the introduction of the Personal Savings Allowance, from April 2016 individuals will be able to receive up to £17,000 of income per annum tax free....

So it appears it comes on top of the personal allowance, and a spouse with no salary or other income is likely to be able to receive £16K of dividends before the tax kicks in.

That's not ironclad, but that's the way it seems to read.

Or Co. Sec. If your spouse is a shareholder then she probably ought to be one of those two things anyway.

Agreed. You can have her sign any cheques, send invoices, sign the corporate return, etc.