Originally posted by malvolio
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Previously on "Question regarding setting up an Ltd and dividents"
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Originally posted by Fred Bloggs View PostI disagree with the brolly recommendation. If he/she has a spouse then he can take £10k tax free as divis as well as his £11k tax free allowance. So, £21k tax free income. The cost of running a Ltd Co can be lower than paying monthly brolly fees. Plus, ofcourse he should be able to claim expenses where a brolly user can't.
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Originally posted by apanos9 View PostFirst question
Do I have to pay myself (as ltd) at HMRC this 3.6K once per year (April)?
Then I give myself a divident of let's say 15K (or even the whole of the remaining amount 18K).
Second question
I will have to pay the 7.5% tax on this divident amount, is that correct?
Third Question
Do I have to provide payslips etc to myself for the 10K I will have as a salary?
I only need to do all the above once a year, is that correct?
PS1. If my girlfriend makes the same amount of mine, does it make any difference if we will set up 1 company with 50% each or 2 different ones?
PS2. Is it better just to register myself as self-contractor?
Second answer - Yes, once you account for the £5k 0% band
Third answer - no, you don't need to do payslips.
PS1 - I wouldn't mix a company with a girlfriend / boyfriend
PS2 - Only if you can find a client that will work with you as self-employed, but many won't.
Good luck - and find an accountant (I recommend InTouch)
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I disagree with the brolly recommendation. If he/she has a spouse then he can take £10k tax free as divis as well as his £11k tax free allowance. So, £21k tax free income. The cost of running a Ltd Co can be lower than paying monthly brolly fees. Plus, ofcourse he should be able to claim expenses where a brolly user can't.
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Originally posted by malvolio View PostBetter advice - for 30k a year, go with a good umbrella...Originally posted by northernladuk View PostThis^^^. 30 K a year gigs shouldnt be contract gigs IMO either. The umbrella used to be more efficient for this level of income but the T&S makes it a little more grey now but an umbrella should still be your first port of call.Originally posted by LondonManc View PostUmbrella definitely. Much more likely to be subject to SDC at that pay level as well.
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Umbrella definitely. Much more likely to be subject to SDC at that pay level as well.
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Originally posted by malvolio View PostBetter advice - for 30k a year, go with a good umbrella...
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Question regarding setting up an Ltd and dividents
Hello all,
I would to apologize for the quality of my question as it may sound quite amateur, but I have just started working as a freelancer and I would like to see my taxation options. A friend told me that it is better to set up an ltd than as self employed, in terms of taxation.
My questions is based on the following example. Let's say that my company, with myself as the only shareholder, makes 30K per year.
I pay myself a salary of 10K per year (not taxable as it is in the tax allowance rate).
I also have expenses of 2K
This means that the rest 18K will have a corporate tax of 20% (3,6K)
First question
Do I have to pay myself (as ltd) at HMRC this 3.6K once per year (April)?
Then I give myself a divident of let's say 15K (or even the whole of the remaining amount 18K).
Second question
I will have to pay the 7.5% tax on this divident amount, is that correct?
Third Question
Do I have to provide payslips etc to myself for the 10K I will have as a salary?
I only need to do all the above once a year, is that correct?
Many many thanks
Panos
PS1. If my girlfriend makes the same amount of mine, does it make any difference if we will set up 1 company with 50% each or 2 different ones?
PS2. Is it better just to register myself as self-contractor?Tags: None
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