Reply to: Maximise income

[Bear]

Hi,

I, as most of you own myco...

Do I?

Brilliant! Can I sell my share then? That would certainly maximise my income.

[malvolio]

"...that contracts are legally binding things not optional extras to be disregarded when convenient..."

- Mal, try telling that to HMRC in an IR35 investigation where they dismiss written contracts at a stroke, and construct notional ones based on the 'actual working relationship' or what they perceive as the actual working relationship. Not worth the paper they are written on then.

Agreed. That's why we started the PCG, remember... and it's why we're supporting the Dragonfly appeal for example.

Just because Gordon's Goons (or is that Alistair's Darlings now) don't follow the rules doesn't mean we shouldn't.

[normalbloke]

"...that contracts are legally binding things not optional extras to be disregarded when convenient..."

- Mal, try telling that to HMRC in an IR35 investigation where they dismiss written contracts at a stroke, and construct notional ones based on the 'actual working relationship' or what they perceive as the actual working relationship. Not worth the paper they are written on then.

[malvolio]

It is certainly possible. It is only the good advice aspect you seem to struggle with though!

See you continue to miss the point of Malvolio entirely. His accountancy and legal advice is no better than anyone else's and obviously not as well formed as that from someone who does that stuff for a living, but that's not what he does. What he has been trying to do is to sell the idea that if you want business taxation benefits, act like a bloody business and not some overpaid permie, that contracts are legally binding things not optional extras to be disregarded when convenient and to realise that from behind my desk, nobody needs a contractor who can't do basic research. Plus the odd splash of cold water from the pragmatic perspective of somone who's been an IT manager for 20-odd years when presented with a question like "Can I stop the contract a month early when I haven't got a notice period".

In other words, contracting is something to be approached as a profession and not a tax dodge, and the reason I'm hard on the ignorant, the fec-kless and the downright lazy is because it makes it harder to sell that message to the clients.

So you stick to studying Tolley's and unpicking the detail for those of us who can't understand it, and I'll stay at the business end where it really matters.

[THEPUMA]

Only if you persuade Puma, Expat and the others that it is possible to combine grumpy and good advice... Perhaps I could do the old Mal every other post: think that would be acceptable to the softies among us?

It is certainly possible. It is only the good advice aspect you seem to struggle with though!

[BrilloPad]

Any thoughts much appreicated

Are you related to Wilmslow?

[ASB]

Now that raises a question in my mind - now that corp tax is up at 21% and basic rate tax is down at 20% has anyone worked out if this has any effect on how much we should pay as PAYE vss Divis to minimise tax.

Sure, slightly less TAX will be paid if you pay yourself PAYE to the full basic rate due to the lower income tax rate.

Not a great idea though because of the NI - overall payment to HMRC would be rather higher.

[malvolio]

Mal, I'm slightly concerned that the recent toning down of your responses has resulted in more stupid questions being asked on this board than previously.

Can we have the old intolerant Mal back please?

Only if you persuade Puma, Expat and the others that it is possible to combine grumpy and good advice... Perhaps I could do the old Mal every other post: think that would be acceptable to the softies among us?

[chicane]

Mal, I'm slightly concerned that the recent toning down of your responses has resulted in more stupid questions being asked on this board than previously.

Can we have the old intolerant Mal back please?

Personal tax is based on your gross personal earnings from any source and has been since around 1825. But how is life on planet Zorg, anyway...?

[handyandy]

Sadly the operative word is 'income' as in 'Income Tax' - don't matter where it comes from - pay, interest from savings, dividends, etc. - if it's any type of income you get (other than capital gains and inheritance which have their own taxes) is usually covered by Inc. Tax and all the different sources are grossed up - what you do get is a tax credit for the corp tax your LTD already paid that offsets the basic rate element of income tax due on your divis.

Now that raises a question in my mind - now that corp tax is up at 21% and basic rate tax is down at 20% has anyone worked out if this has any effect on how much we should pay as PAYE vss Divis to minimise tax.

[slackbloke]

Hi,

I, as most of you own myco. What I'm thinking of is taking the most income home without going into the higher tax bracket. So how I thought I would achieved this is by paying myself a salary of 35,999, paying all the PAYE on that @ 20% income tax, employers NI and Employees NI. Then after all that was done, pay corp tax on any profits and then take 35,999 in dividend and pay then 10% tax on that.

I'm thinking that salary income and div income are 2 seperate things and therefore if I was to do the above I wouldn't break into the higher rate tax band.

Any thoughts much appreicated

Brilliant, you have brightened up my day :-)

[Bomber]

Thanks

Wishful thinking I know. Zorg is ok, I hear the weather is better on safire so I'm floating around the void atm.

[techno]

Hi,

I, as most of you own myco. What I'm thinking of is taking the most income home without going into the higher tax bracket. So how I thought I would achieved this is by paying myself a salary of 35,999, paying all the PAYE on that @ 20% income tax, employers NI and Employees NI. Then after all that was done, pay corp tax on any profits and then take 35,999 in dividend and pay then 10% tax on that.

I'm thinking that salary income and div income are 2 seperate things and therefore if I was to do the above I wouldn't break into the higher rate tax band.

Any thoughts much appreicated

[Crossroads]

Any thoughts much appreicated

Take professional advice.

[malvolio]

Personal tax is based on your gross personal earnings from any source and has been since around 1825. But how is life on planet Zorg, anyway...?