Tax Mess - Advice would be appreciated!

[vertigo]

You may be okay then - but more through luck than judgement

Talk to whoever manages you account at the management co.

Yeah, definitely luck rather than judgement!

I definitely need to speak to my management co. and try and get my head round my finances.

Thanks alot for all your help!

[Pondlife]

You may be okay then - but more through luck than judgement

Talk to whoever manages you account at the management co.

[vertigo]

Careful as you have to take the 35K into account. When did you start contracting (Oct?), in which case any divs that would take your total earnings over 38K for that year are taxable.

HTH

I started contracting in August 2005. Prior to that i'd had no earnings since March 2005. Between August 2005 and Jan 2006 i was paid 35k by my managed company.

I then stopped work between Feb 2006 and April 2006. Since April 2006 i have been paid about 35k by my managed company.

[vertigo]

You need to ask your managed company what they have payed and let us know. Assuming you've been made a director of the managed company, here is a short list of the major taxes to be paid:-

Corporation Tax
VAT
Employer's NI
Employee's NI
Income Tax
Dividend Tax (what is the correct name for this?)

The first three are likely to have been handled by the managed company as they are "company" taxes. The last three possibly haven't as they are "personal" taxes that need to be paid PAYE (I do it monthly at the post office).

Without more info, I'm not sure I can be more specific.

Thanks, i think i need to stop being so lazy, get in touch with them and try and learn a bit about what i should be paying.

I'm pretty sure they pay me dividends less corporation tax, but further than that i don't know.

[Pondlife]

Careful as you have to take the 35K into account. When did you start contracting (Oct?), in which case any divs that would take your total earnings over 38K for that year are taxable.

HTH

[vertigo]

Thanks for the reply Pondlife
As i understand it, i get paid a minimal salary of approx 10k. The rest is dividends.
Fortunately in 2005/2006 (April to April) i only worked between Aug 2005 and end Jan 2006. In this time i was paid around 35k.
I think i've pretty much answered my own question here... but is it the case that i'm actually ok because my dividend payments are not high enough to trigger additional taxation?
It's probably my work since April i should be worrying about now!

[Cowboy Bob]

You need to ask your managed company what they have payed and let us know. Assuming you've been made a director of the managed company, here is a short list of the major taxes to be paid:-

Corporation Tax
VAT
Employer's NI
Employee's NI
Income Tax
Dividend Tax (what is the correct name for this?)

The first three are likely to have been handled by the managed company as they are "company" taxes. The last three possibly haven't as they are "personal" taxes that need to be paid PAYE (I do it monthly at the post office).

Without more info, I'm not sure I can be more specific.

[Pondlife]

If you are being paid with a combination of salary and dividends then tax may be due on the dividends depending on the amount. If you're just being paid salary then they should be taking it at source through PAYE.

Note: yoou are talking about the 05/06 tax year, correct? In which case you need to factor your pre-contract earnings into any calculations for that year.

[vertigo]

Hi
i'm new(ish) to contracting - i've been doing it for 12 months now. The first 4 were using an umbrella company, the last 8 have been using a managed company.

I am extremely disorganised, and have a very limited understanding of tax, so i (lazily) assumed that using a managed company meant i had to pay no notice of tax.

In short i've not saved any of the money i've been paid over the last 12 months. It's all gone. But now a friend has told me that i will at some point be liable to pay more tax on the money i've earnt. Is this the case? I, probably stupidly, assumed my managed company took care of all tax deductions, and so the money that i earnt was mine to do with as i pleased.

Have i messed up badly? Please help with any advice, it will be much appreciated.

Many thanks in advance!