I would have thought if your contract is worth more than £60k and you claim you would be on extremely thin ice
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Collapse
You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:
- You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
- You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
- If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.
Logging in...
Previously on "New to Contracting - Question about Tax Credits"
Collapse
-
-
Originally posted by Lance View PostIf you're a LTD co contractor you presumably reckon you're outside IR35.
If you are, but not paid enough such that you can get tax credits then you're quite junior. And therefore likely to be under D&C.
He's been underpaid for 9 years as a permie hence the need for tax credits, and is new to contracting.
It doesn't mean he's junior.
Leave a comment:
-
Originally posted by Lance View PostIf you're a LTD co contractor you presumably reckon you're outside IR35.
If you are, but not paid enough such that you can get tax credits then you're quite junior. And therefore likely to be under D&C.
That's my chain of thought when I see this sort of question. Is it worth raising the attention of HMRC? It sounds risky to me. You might be outside but attracting attention doesn't seem wise.
If I hadn't phone HMRC and got advice I'd be absolutely screwed right now, they are not just sitting there waiting to pounce on people who have made genuine mistakes or need advice.. give them a call, explain the situation and see what they say.
If youre just general asking advice they won't even need your details
Leave a comment:
-
If you're a LTD co contractor you presumably reckon you're outside IR35.
If you are, but not paid enough such that you can get tax credits then you're quite junior. And therefore likely to be under D&C.
That's my chain of thought when I see this sort of question. Is it worth raising the attention of HMRC? It sounds risky to me. You might be outside but attracting attention doesn't seem wise.
Leave a comment:
-
I thought this was income based - so if you earn over £60k a year you get nothing - or you can take the tax credit but have to pay it back at the end of the year.
I would have thought if your contract is worth more than £60k and you claim you would be on extremely thin ice.
Leave a comment:
-
I did this many years ago when I started contracting, I paid NMW and small amount of dividend, one year I paid more dividend and ended up paying back the credit overpayment.
There was never any questions asked about money left in the LTD account, I just figured its the companies money not mine so of no concern, I always put my LTD down as the employer and the address is the same as my home address so they could have checked\questioned it but they never did.
Like I said its a good few years ago so you probably need to read up on it
Leave a comment:
-
Originally posted by bigup View PostI am wanting to start contracting (IT sector via Agencies) as an LTD and was wondering how this works out with my tax creditsLast edited by Contractor UK; 13 May 2018, 13:33.
Leave a comment:
-
You need to speak to your accountant. A number of things in that they should be able to correct /clarify.
Leave a comment:
-
Does anyone do this? I'm wondering how it's worked out
Posting to an old thread I know. I've only just seen that this is a possibility. I'm in a similar situation to OP, I'm wondering how this has worked out for people. For me, my Limited's income in very up and down, I might have a good year, in which case I retain more money in the business, but take an income that would qualify me for a small amount of tax credits (have just been on the calculator), in other years, I might not bring as much into the business, but continue to pay myself as previously. It looks like I'd have to pay myself NMW, which I'm not quite doing now.
If anyone has done this, any problems with the retained profits in the business for when times are a bit lean (relatively!). Do you need to have a contract of employment with your limited?
Anon
Leave a comment:
-
When you receive your child tax credit form it asks you to put in your income from employment so you enter what you have been paid PAYE which presumably will be Minimum wage (you want to make sure it is at least minimum wage otherwise they start asking questions about why your on less than the legal amount)
Also on the Form there is a section for other income which is where you enter what you have been paid via dividends
Leave a comment:
-
Yes your accountant will be able to do this for you. Just make sure you ask them about the first years Self Assessment return as not all accountants include this in the first year costs so takes some people by surprise.
Leave a comment:
-
Won't your tax credits be based on your total income, i.e. any salary and dividends you draw from YourCo?
Leave a comment:
-
New to Contracting - Question about Tax Credits
hi all
New to the world of contracting
Been with my current employer for last 9 years, on a standard paye scheme, i claim child benefit and working tax credits, I have 3 children and a wife who cares for the children full time.
I am wanting to start contracting (IT sector via Agencies) as an LTD and was wondering how this works out with my tax credits
I normally get a annual letter in the post and i have to declare my income and the tax credits gets worked out.
As contracting isn't guaranteed work for the year and swapping between a few contracts throughout the year, how difficult does this make working out tax credits?
i aim to appoint a accountant , would they be able to sort this out for me?Tags: None
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Leave a comment: