Side contract...

[eek]

This is where the likes of these threads need to end.

Not quite - as the important bit is what does your contract say and allow.

[DevUK]

Have a chat with an accountant.

This is where the likes of these threads need to end.

[WordIsBond]

Probably no need to register for VAT nor anything to be gained by doing so.

If this is all straightforward and you are an experienced contractor you may not need much accountancy advice. On those amounts, I'd be looking for someone pretty low priced.

Take the income, deduct accountancy fees and any other expenses, and then pay everything but £2,470 into a pension. Use the £470 to pay your CT and pay yourself a £2K dividend. (If you have dividend paying investments not inside an ISA, forget this and just put it all in your pension.)

Recognise that when you take the pension out in a few years, you'll be paying some tax. And you could pay yourself a salary up to £8.6K now without any NI. So depending on how much pension you have and how much other income you'll have in retirement, just taking that much in salary wouldn't be the end of the world. Sure, you pay 40% income tax on it but nothing else, and there will be tax on it later if you put it all on the pension. If you have a use for the money, it might be worth the 40% tax.

If married, consider shares for spouse as well to get double the dividend allowance.

[northernladuk]

Have a chat with an accountant. Ignore these lot that will post next....
.

LondonManc is a sound guy and really knows his stuff...

[eek]

Have a chat with an accountant. Ignore these lot that will post next....

In all seriousness, it's probably a situation that not many have encountered. You may also want to check your current employment contract to see if you're tied in to only working for them.

It seems something that is easily moved out of scope - a retainer (to ensure availability) and a fixed fee for every review.

As LondonManc says what does your contract say about outside work - and if it doesn't allow it see if you can get the contract changed using a lawyer if necessary.

[Lance]

So can I set up a limited company and then punt the full 20k into a pension ?

Yes you can (althoguh it won't be £20k by the time you've paid an accountant). Whether you should is differemt. I'd take the £2k dividend before that as it's tax free (although that might change in 2 weeks)

Do I need to take a minimum salary ?

No

I am already a higher rate tax payer so not much advantage to me take any cash out as I am nearing retirement.
Will I need to process accounts etc on such a small turnover.

if you have a LTD then you will have to process accounts. You won't need to be VAT registered on such a small turnover though. You might consider being a sole trader if the client is happy although you'll be paying tax at 40% (albeit no CT). You need to run some numbers and see what works best for you.

[LondonManc]

Have a chat with an accountant. Ignore these lot that will post next....

In all seriousness, it's probably a situation that not many have encountered. You may also want to check your current employment contract to see if you're tied in to only working for them.

[kobie]

Hi
Just after a bit of advice and some general input.

I was a contractor for 25 years and took a job in permiedom as I wind down to retirement.
Technically I have retired just not told them !

So I have been offered a small annual "advice only" contract to review designs etc for a company where I had previously contracted.
I've not been near them in the last 3 years plus I'm hopeful that it will be be fully outside of IR35.

I expect to receive about 20k+vat on an annual basis.

So can I set up a limited company and then punt the full 20k into a pension ?
Do I need to take a minimum salary ?
I am already a higher rate tax payer so not much advantage to me take any cash out as I am nearing retirement.
Will I need to process accounts etc on such a small turnover.

As always thoughts and comments appreciated,

Thanks and Rgds
Kobie.