Pension, Dividends and Tax

[Reporter]

I've just started a Limited Company, contracting outside IR35 (I hope!)

I am paying myself a small salary, and taking more in dividends. Looking at my projections, it seems that by December the amount of dividends I have taken will take me to the point where I will need to pay additional tax.

Some advice for a novice, please on:

1) Paying additonal amounts into a pension to avoid paying additional tax.
2) Continuing to take dividends and pay additional tax after December
3) Leaving the money within my Ltd Company.....not really sure what this would mean though, i.e how and when can I get my hands on the money without paying additional tax.

Thanks!

[Xenophon]

Hold...

[Xenophon]

Hold....

[snaw]

I've just started a Limited Company, contracting outside IR35 (I hope!)

I am paying myself a small salary, and taking more in dividends. Looking at my projections, it seems that by December the amount of dividends I have taken will take me to the point where I will need to pay additional tax.

Some advice for a novice, please on:

1) Paying additonal amounts into a pension to avoid paying additional tax.
2) Continuing to take dividends and pay additional tax after December
3) Leaving the money within my Ltd Company.....not really sure what this would mean though, i.e how and when can I get my hands on the money without paying additional tax.

Thanks!

Wrong forum. HTH. Ignore the flaming that may come your way ... or avoid it by diong a search on a question that's been asked a million times already on the correct forum ...

[ThomasSoerensen]

I've just started a Limited Company, contracting outside IR35 (I hope!)

I am paying myself a small salary, and taking more in dividends. Looking at my projections, it seems that by December the amount of dividends I have taken will take me to the point where I will need to pay additional tax.

Some advice for a novice, please on:

1) Paying additonal amounts into a pension to avoid paying additional tax.
2) Continuing to take dividends and pay additional tax after December
3) Leaving the money within my Ltd Company.....not really sure what this would mean though, i.e how and when can I get my hands on the money without paying additional tax.

Thanks!

Just spend the money. Don't tell anyone and you are in great shape. How are they ever going to find out?

[Xenophon]

Just spend the money. Don't tell anyone and you are in great shape. How are they ever going to find out?

WHS

[Xenophon]

Gosh.

That was disappointingly mild...

Agreed.

[DiscoStu]

I've just started a Limited Company, contracting outside IR35 (I hope!)

I am paying myself a small salary, and taking more in dividends. Looking at my projections, it seems that by December the amount of dividends I have taken will take me to the point where I will need to pay additional tax.

Some advice for a novice, please on:

1) Paying additonal amounts into a pension to avoid paying additional tax.
2) Continuing to take dividends and pay additional tax after December
3) Leaving the money within my Ltd Company.....not really sure what this would mean though, i.e how and when can I get my hands on the money without paying additional tax.

Thanks!

Just draw it all out at a cashpoint. Nobody will know...

[pmeswani]

I've just started a Limited Company, contracting outside IR35 (I hope!)

I am paying myself a small salary, and taking more in dividends. Looking at my projections, it seems that by December the amount of dividends I have taken will take me to the point where I will need to pay additional tax.

Some advice for a novice, please on:

1) Paying additonal amounts into a pension to avoid paying additional tax.
2) Continuing to take dividends and pay additional tax after December
3) Leaving the money within my Ltd Company.....not really sure what this would mean though, i.e how and when can I get my hands on the money without paying additional tax.

Thanks!

If I were to follow the other types of posts, I would suggest putting all your profits on E-bay and take the lowest offer. However I will try to be sensible (if there is such a thing).

Regardless of when your year end is, you have to decide what you want to do with the profits. Some people would put it (some or all) into a pension in order to reduce the CT bill, some would leave it in the business and take a hit and ensure that there is funds available for a rainy day. We cannot make that decision for you. You have to make the decision on what your short and long term goals will be.

BTW, one of the posters were correct in that this is the wrong forum for this type of post. Should have been in the Accounting Forum.

Come year end for me, I will make a sizeable contribution into my Pension and make sure I have enough funds to pay my VAT & CT Bills as well as providing myself an income for 3 months (if possible), so that I can take a holiday if needed. The pay rise I gave myself will be withdrawn in order to extend the life of the funds available.

The essence of my argument, if there is one, is not to be too gready in terms of avoiding tax.

[HairyArsedBloke]

I've just started a Limited Company, contracting outside IR35 (I hope!)

I am paying myself a small salary, and taking more in dividends. Looking at my projections, it seems that by December the amount of dividends I have taken will take me to the point where I will need to pay additional tax.

Some advice for a novice, please on:

1) Paying additonal amounts into a pension to avoid paying additional tax.
2) Continuing to take dividends and pay additional tax after December
3) Leaving the money within my Ltd Company.....not really sure what this would mean though, i.e how and when can I get my hands on the money without paying additional tax.

Thanks!

Your best bet is to take the money that would otherwise have gone to the T-man and put it all into a High Yield Investment Program such as Blue Profit which offers 9000% per day. In the unlikely event of there being any losses those can be written off against tax.

Can’t go wrong with schemes like that!