Reply to: 7 month holiday/Leave

[rootsnall]

Backpacking it through South America, NZ, Aus, Thailand, Cambodia, Vietnam, China & South Africa for wedding where I’m originally from. I always wanted to take minimum of 6 months out to see the world before I turned 30 and being tied down with mortgage & kids. Just made it in time with my age although im sure kids will follow very soon after returning.

I'm a bit jealous, I did that exact route over a 7 month period as far as Vietnam a few years back. It was the last time I escaped, tied down with kiddie winks now !

[Duke]

Yeah, company has only been trading for a year, so I guess I would’nt really benefit from taper relief.

I’ll have a word to my accountant again, see if the advice will be of any use. Seems like last few months I’ve got most of my tax/legal questions answered by just reading through these forums. Not to impressed with my accountant at SJD, always getting late replies with the bear minimum in advice to questions. Very close asking to change accountants within SJD or just find a more personal accountant with decent advice and pay more.

‘ps. where are you off to ?’

Backpacking it through South America, NZ, Aus, Thailand, Cambodia, Vietnam, China & South Africa for wedding where I’m originally from. I always wanted to take minimum of 6 months out to see the world before I turned 30 and being tied down with mortgage & kids. Just made it in time with my age although im sure kids will follow very soon after returning.

[TheFaQQer]

Should be sortable but if not leave a forwarding address in the UK ( family member ? ) and a few cheques to sort things. My mum can forge my signature pretty well ! It's a lot easier these days with internet cafes the world over and cheapo phone calls from most countries if there is a panic. You have to trust your accountant to make sure any issues are dealt with or atleast forwarded !

ps. where are you off to ?

I'll do it for you - just send me a few signed cheques and I'll make sure that the accounts are all empty when the company is closed.

[rootsnall]

Sounds like an idea, although I’ve only got 7 weeks left before I leave. Would this be enough time to sort out all my payments for VAT & TAX before I leave.

Im sure if I spoke to my accountant about the idea, probably advise not to close and to keep me on there books for business.

If I decided close the Co, Should I keep paying an accountant in case other issues arise further down the line, TAX & VAT….or is that all sorted out when closing down the Co ?

Should be sortable but if not leave a forwarding address in the UK ( family member ? ) and a few cheques to sort things. My mum can forge my signature pretty well ! It's a lot easier these days with internet cafes the world over and cheapo phone calls from most countries if there is a panic. You have to trust your accountant to make sure any issues are dealt with or atleast forwarded !

ps. where are you off to ?

[TheFaQQer]

Depends how long you've had the company, though. I think you can only shut it down and take the relief if it's been trading more than two years.

[Alan @ BroomeAffinity]

Seven weeks should give you plenty of time to bring VAT / PAYE / NIC up to date. Before the company can be closed down you need a waiting period of (I think) 3 weeks. You accountant should be able to deal with the closure of the business in your absence. The company needs to be still open for you to withdraw the capital anyway.

[Duke]

Sounds like an idea, although I’ve only got 7 weeks left before I leave. Would this be enough time to sort out all my payments for VAT & TAX before I leave.

Im sure if I spoke to my accountant about the idea, probably advise not to close and to keep me on there books for business.

If I decided close the Co, Should I keep paying an accountant in case other issues arise further down the line, TAX & VAT….or is that all sorted out when closing down the Co ?

[Alan @ BroomeAffinity]

If you are away for 7 months I'd do as someone has already advised:

Shut down the company and take what you can as your return on capital maximising your CGT threshold.

Its easy done - I've advised on this on a lot of occasions.

[Hex]

ahh true, you have a point there regarding taking profit while company is not earning. Thanks.

Unless I take large chunk in dividends before I leave which I was going to do anyway and not withdraw dividends or salary again till I get find a new gig when I get back...Although that could take a while. Ummm

Interested to find out what other contractors do when they take time out.

Why on earth would taking dividends depend on whether you were currently earning for the company or not?

You can declare dividends for any profit which you have within the company at any time you like, regardless of whether you are still earning money for the company. Your roles as employee of the company and shareholder are completely separate.

If your company has accrued profits then it can distribute these as dividends whenever it sees fit to do so.

If you wish to continue receiving salary as PAYE as an employee then you can do so as long as the company has funds to pay this.

Neither of these things are dependant on whether your are still earning money for the company or not. It is all to do with the existing state of your company funds.

I'd probably continue taking PAYE up to NMW and take the rest as dividends as I required.

[rootsnall]

Interested to find out what other contractors do when they take time out.

If I was heading off for a good chunk of time I used to shut my Co down ( done it 3 times I think ) and use my personal capital gains allowance to save a bob or two in tax. Not sure how it works exactly with the current Co tax/dividend regime, I suggest a question to the usual suspects on here !? It costs say £150 to shut it down and its free to start up a new Ltd on your return. It also means you don't have to worry about various returns and forms while you are away. The one time I left a Co running I got in a bit of strife for not submitting a VAT return.

[RightLaugh]

lucky bar steward

[Duke]

Thanks Bear, yip sounds like it the right way to go.

yes, I did ask my accountant what steps I need to take so that they can take care of VAT and Tax returns.. etc whilst away.

[Duke]

ahh true, you have a point there regarding taking profit while company is not earning. Thanks.

Unless I take large chunk in dividends before I leave which I was going to do anyway and not withdraw dividends or salary again till I get find a new gig when I get back...Although that could take a while. Ummm

Interested to find out what other contractors do when they take time out.

[Bear]

Agreed

Best thing is to take a divi now to give you enough in your personal account to pays the bills for the time your away.

Continue to take PAYE but no divis whilst your off.

Ensure something is arranged to take care of any company business whilsy your away - you will have VAT returns to do, PAYE returns to do etc. - Do not forget about these!!

[r0bly0ns]

It has nothing to do with IR35, IR35 is for a contract, not for a business.



Dividend's are shares of profit, and it could be argued that how can your business be making any profit if there is no turnover for the 7 months?


If in doubt, get the recomendation from your accountant in wrinting and stick to it. If the account is wrong (which vary rarely happens in my opinion) then you have some fall back.