When to change from brolly

[GreenerGrass]

Hi, anyone who uses a brolly (especially Parasol) and wants to get a statement of earnings or anything out of them, make sure you do it before you leave or it will take weeks of phone calls and emails.

And just to clear a few things up, brollies are barely any less hassle than running a Ltd. Add in the extra payment delays and additional party risk, and increased taxes and I wished I'd never even bothered (did it as a temporary move before setting up a Ltd.)
Parasol also completely messed up my taxes as they were paying the wrong rate, despite having all the correct paperwork. Useless.

[Gonzo]

If you go over the limit, you won't actually have to pay the tax until Jan 2010, meaning you can pay off more of your debts sooner as long as you're sure you can pay the tax when you need to.

Just don't forget the "Payment On Account" which will be a bit of a shock when it comes.

For those that haven't experienced that yet, the timeline would be:

Jan 2010 - 2008/09 tax bill + 50% 2008/09 tax bill
July 2010 - 50% 2008/09 tax bill

This way you avoid your tax bill for a year, but then it catches up with you and you have to pay two years worth in the space of six months.

[luimneach2005]

luckily i have an excellent credit rating, i'm just the kind of person who isn't used to having debt and need to clear it before i am comfortable buying a home etc. down to about £12k so not overly bad.

[pmeswani]

thanks for the quick replies. just one more question? I went contracting due a massive financial loss last year. can i take all my earnings out in some tax beneficial way so that i can continue to pay off debts incurred in moving back to the uk?

or put simply, can i take all my money each month or am i better staying brolly until my debt is clear?

I have some personal debts (less than £10k in total) and have been able to start my own Ltd company (and opened a Business Bank Account). If you have a bad personal credit, then you may need to wait before your credit status changes to a more favourable one before starting your Ltd company. You may need to speak to a financial advisor / accountant beforehand to decide if you can or cannot start your own Ltd Company.

[VectraMan]

thanks for the quick replies. just one more question? I went contracting due a massive financial loss last year. can i take all my earnings out in some tax beneficial way so that i can continue to pay off debts incurred in moving back to the uk?

or put simply, can i take all my money each month or am i better staying brolly until my debt is clear?

As you've already done a few months this year, you can probably pay everything (after 21% corporation tax) as dividends only for the rest of the year, which are tax free up to the upper rate limit. If you go over the limit, you won't actually have to pay the tax until Jan 2010, meaning you can pay off more of your debts sooner as long as you're sure you can pay the tax when you need to.

You can also borrow some money off the company, as long as you can pay it back before the company year end, which is good for reducing debts.

Ask an accountant. Definitely one big advantage of going Ltd. is being able to fit the payments to your personal circumstances.

[Torran]

thanks for the quick replies. just one more question? I went contracting due a massive financial loss last year. can i take all my earnings out in some tax beneficial way so that i can continue to pay off debts incurred in moving back to the uk?

or put simply, can i take all my money each month or am i better staying brolly until my debt is clear?

the latter imo. Start fresh with no debts hanging over you

[blacjac]

thanks for the quick replies. just one more question? I went contracting due a massive financial loss last year. can i take all my earnings out in some tax beneficial way so that i can continue to pay off debts incurred in moving back to the uk?

or put simply, can i take all my money each month or am i better staying brolly until my debt is clear?

That is a very good example of what to ask each accountant before deciding which one to go with

[luimneach2005]

thanks for the quick replies. just one more question? I went contracting due a massive financial loss last year. can i take all my earnings out in some tax beneficial way so that i can continue to pay off debts incurred in moving back to the uk?

or put simply, can i take all my money each month or am i better staying brolly until my debt is clear?

[blacjac]

Agree with above, no benefit at all from starting your business at financial year end as financial year end is 5th April and you will end up with a company year end of either 31st March or 30th April anyway.

Also have no experience of NW or SJD, but if you are looking at those 2 then I would recomend looking at Upton Accountants as well, much the same service and similar pricing by all accounts.
Phone each one of them up and then go with the one you think best after that.

[slackbloke]

Unless you plan to use some sort of time travel machine, I wouldn't bother. :P

It doesn't matter when you start your ltd company. Your year end is typically 12 months from formation. You may be able to change the year end (not sure how long by), but it may not be worth the hassle.

I don't have any specific feedback regarding NW or SJD, but a search may be worth while.

Wrong, it makes a huge difference when you start trading via a limited company (although not sure you have even understood the question). If you do it before April 09, you can then pay dividends in 2008/2009 personal tax year and take advantage of the tax break this affords. If you want to go limited, do it at the earliest available opportunity.

[pmeswani]

I really want to go limited, should I wait until Apr 08?

Also, anyone have feedback on Nixon Williams or SJD Accountancy - would love to hear from anyone who has used both, how do they compare on costs and service (can't find costs from SJD's website)

Unless you plan to use some sort of time travel machine, I wouldn't bother. :P

It doesn't matter when you start your ltd company. Your year end is typically 12 months from formation. You may be able to change the year end (not sure how long by), but it may not be worth the hassle.

I don't have any specific feedback regarding NW or SJD, but a search may be worth while.

[luimneach2005]

I really want to go limited, should I wait until Apr 08?

Also, anyone have feedback on Nixon Williams or SJD Accountancy - would love to hear from anyone who has used both, how do they compare on costs and service (can't find costs from SJD's website)