Umbrella vs Max Divs with Ltd

[stek]

Remember that it's a beginners mistake to take maximum dividends each month if you don't need the money right away. Better to take up to the combined £42k or whatever it is, then extra money if you NEED it. If not, simply roll forward into the next tax year and take then.

A tax deferred is a tax saved!

I'm been contracting since 1990 lol!

But I get ur point...

I was mulling it over since I have two kids off to uni at once in September, and whilst my rate is pretty good and I have a fair warchest, I am personally fairly skint!!

Comes a time to take it and swallow like Jim told me blindfolded that time on Jim'll Fix it.

I'll have to take the hit, just the best way to take the hit. I've enough in the warchest that if I didn't get anything before it got near to running out, I'd be unemployable by then so I think it's time to draw down a bit....

[Waldorf]

Largely the savings would be ee's and er's nic plus vat flat rate profit if that applies. Could still be significant. That may (will) change in April though.

Broadly agree, cannot see a brolly being a better option and certainly brollies look more at risk from the proposed changes to the travel expenses.

[Waldorf]

Remember that it's a beginners mistake to take maximum dividends each month if you don't need the money right away. Better to take up to the combined £42k or whatever it is, then extra money if you NEED it. If not, simply roll forward into the next tax year and take then.

A tax deferred is a tax saved!

Not always.

Be careful when tax planning that the tax rules that apply now may not apply in the future, a case in point being the new tax on dividends from April 2016. Past changes have included changes to closing the company, moves to 45/50% tax etc.

You also need to think what you plan to do with the money, it will do nothing in a company account, where outside you could reduce debts or invest.

[PerfectStorm]

Remember that it's a beginners mistake to take maximum dividends each month if you don't need the money right away. Better to take up to the combined £42k or whatever it is, then extra money if you NEED it. If not, simply roll forward into the next tax year and take then.

A tax deferred is a tax saved!

[Alan @ BroomeAffinity]

Largely the savings would be ee's and er's nic plus vat flat rate profit if that applies. Could still be significant. That may (will) change in April though.

[Jessica@WhiteFieldTax]

Pre or post April 2016?

For 15/16 there should be a strong bias to the company/max div answer.

For 16/17 it's a finer call, although my modelling suggests, on what we know so far, company still wins.

However to a degree is apples v pears, IMV the difference between YourCo and Umbrella is wider than just tax.

[stek]

Quick aside before I speak to accountant lol who might have a vested interest....

If one was to take Max Divs from their Ltd, assume minimal expenses, would that be much different than going Brolly?

From my quick calcs, still better ltd but not much in it, basically the employers NI......