Why bother with a sipp also when covid19 will kill most pensioners anyhoo
Sent from my iPhone using Contractor UK Forum
- 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!
Reply to: Advice for returning to contracting
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 "Advice for returning to contracting"
Collapse
-
If he's furloughed, intending contracting to April 2021, has a dormant company with 80 odd grand in it, bothered about IR35 issues and is going to mess around giving his wife shares then take them off her etc, why not just simplify things and just draw day to day money needs from the company?
Leave a comment:
-
Bad idea to change shareholdings twice in a year, could draw attention. Not illegal as such but could fall under aggressive avoidance. I wouldn't recommend that. But what some of these guys are overlooking is this:
Originally posted by too_many_details View PostI made my company dormant with about 80k in the business account.
Originally posted by too_many_details View Post4. I can put 40k into my SIPP (like i did before)
1. Make the company active again.
2. Pay yourself the minimal salary but no divs for as long as you can afford it.
3. Then decide.
If Mrs still doesn't have a job, make her a 50% shareholder and pay equal divs to both of you. Keep the divs as low as you can afford for most of the year so you don't put her into higher rate if she gets a good job, but presumably by sometime in the autumn, at the latest, you won't need to worry about that for this tax year.
If she does get a job, give her a 5% share, pay her £2K in divs and you £38K. That takes advantage of the div allowance for her and keeps you in basic rate.
When you get down to about £40K, if the share structure isn't right for you anymore, don't change it. Just dump the rest into your SIPP, close the company, open a new one with the right share structure, and carry on. Obviously, if the share structure is still fine (say, Mrs has 50% and isn't employed, or Mrs has 5% and is employed), just carry on.
But your reserve isn't big enough to make it an issue to close the company, especially if you are willing to dump half of it to a pension. That means you've only got £40K to extract.
This advice may be wrong if Mrs is a bank executive who will earn £40K a month.
Leave a comment:
-
Originally posted by northernladuk View PostI gratefully accept the idiot of the day award.
Leave a comment:
-
Originally posted by northernladuk View PostWasn't she already director in the Arctic systems and the argument it was fair for her supporting hubby as he ran the business and her directors responsibility. In this case she's nothing more than a one off tax mule.
It's aggressive avoidance, pure and simple, so whatever test the want to apply, it will fail.
I think the point is, fine to give her shares, but don’t duck around with them.
Leave a comment:
-
Originally posted by too_many_details View PostI would only do it the once though, when she gets a job.
But adjusting shareholdings regularly to minimise tax... nah. But it's your backside that HMRC will ream, so who cares what a bunch of moralisers think, right?
Leave a comment:
-
Originally posted by Lance View PostTo be fair that’s why Arctic systems split the shares....
Your point, I think, is that changing share split, is not protected by the Arctic systems test case.
However I don’t believe as a one off it would be a problem.
changing twice a year might attract more attention but whether that would fail a test, or if HMRC would even pursue it is speculation.
It's aggressive avoidance, pure and simple, so whatever test the want to apply, it will fail.
Leave a comment:
-
Originally posted by northernladuk View PostBecause you are going to add her purely to offload of dividends and take her off soon after. You are doing HMRC out of tax money with a pretty aggressive tactic.
Your point, I think, is that changing share split, is not protected by the Arctic systems test case.
However I don’t believe as a one off it would be a problem.
changing twice a year might attract more attention but whether that would fail a test, or if HMRC would even pursue it is speculation.
Leave a comment:
-
Originally posted by too_many_details View PostI can add my wife as a shareholder with no issue. What am I missing here that makes you think HMRC will look on this unfavourably?Last edited by Contractor UK; 28 June 2020, 15:41.
Leave a comment:
-
Originally posted by GhostofTarbera View Post
Leave a comment:
-
Originally posted by northernladuk View PostTwice. You allocate her the shares and then remove them. They link her name between change in shareholding and one year of dividend income on Self assessment and boom...
Everyone wanting to aggressively syphon money out of your limited would only need 2 changes as well...
According to what I have read, I can add my wife as a shareholder with no issue. What am I missing here that makes you think HMRC will look on this unfavourably?Last edited by Contractor UK; 28 June 2020, 15:41.
Leave a comment:
-
Leave a comment:
-
Originally posted by northernladuk View PostTwice. You allocate her the shares and then remove them. They link her name between change in shareholding and one year of dividend income on Self assessment and boom...
Everyone wanting to aggressively syphon money out of your limited would only need 2 changes as well...
Leave a comment:
-
Originally posted by too_many_details View PostI would only do it the once though, when she gets a job.
Everyone wanting to aggressively syphon money out of your limited would only need 2 changes as well...
Leave a comment:
-
Originally posted by Lance View PostThe reason you need to use your accountant is because you clearly don't know that divis are taxed at 32.5% in the higher rate.
Manage your accountant FFS. Get them on the phone and donl;t let them go till they've answered your queries to your satisfgaction...
even better. Switch now before you really need them.
Leave a comment:
- 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: