Reply to: Ltd Co Formation

[NoddY]

I am a qualified

D.I.C.K.

[simondolan]

Accountants

My qualification is Chartered Tax Adviser CTA (or formerly ATII).

We also have within our firm individuals with the following qualifications:

ACCA
ACA
FCA
FCCA
CA
SA
ACMA

This broad spread of qualifications enables us to give a well rounded service for clients.

[Bradley]

Professional

Ummm, if they need the ATT qualification to take the CTA exams then they *do* need to be qualified...........

In anycase, the ICAEW is *one* of the qualifications accepted by the CIOT, the ATT is another. The point being you need to be qualified in taxation / accountancy to some degree prior to taking the CIOT exams.

If you'd followed the logic of the quote then you would have realised that I was referring to professionally qualified people - the earlier piece quoted implied that only professionally qualified accountants could sit the CTA exams, and only professionally qualified accountants from the English Institute at that.

I think you'll find that Simon Dolan of SJD is not a professionally qualified accountant for example, that's according to the SJD website at least.

[DaveB]

Sorry but this is just pants. You don't have to be qualified at all to take the CIOT exams. There are many students who start training for the Tax Technicians qualification (ATT) straight from school. If they get that then they can go on to sit the CTA exams.

Ummm, if they need the ATT qualification to take the CTA exams then they *do* need to be qualified...........

In anycase, the ICAEW is *one* of the qualifications accepted by the CIOT, the ATT is another. The point being you need to be qualified in taxation / accountancy to some degree prior to taking the CIOT exams.

[Flinty]

Wage/Divi

I have just started up plc after some sterling advice from members of this board and am hoping that by the time I get back off my week's hols my bank account will be setup and I will be able to invoice the agency I am currently working through.

I intend to go along the lines of what Malvolio said, pay myself between 20-30k pa (not decided how much yet), plus regular dividends, but ensuring there's some money left in the company to hopefully help build it up.

[Bradley]

Qualifications

A Chartered Tax Advisor will have specialist qualifications in taxation from the CIOT, a prerequisite for which is holding the ICAEW qualification.

If your accountants are simply Chartered Accountants they will *probably* be able to handle your tax for you but may come unstuck if you get major IR35 Issues for example. a CTA will almost certainly be able to handle anything that comes your way with regard to taxation.

All the gruesome details can be found here

http://www.freelanceuk.com/tax_advice/1146.shtml

Sorry but this is just pants. You don't have to be qualified at all to take the CIOT exams. There are many students who start training for the Tax Technicians qualification (ATT) straight from school. If they get that then they can go on to sit the CTA exams.

Re the linked article - there are many institutes of chartered accountants the oldest and most prestigious of which is the Institute of Chartered Accountants of Scotland. Their members denomination is CA.

[DaveB]

An option that occurs to me is to take minimum wage + divi but not take all your divi entitlement. Use the rest to invest on behalf of the company and build the value of the company assets / create alternative income streams. That way you can argue that you are building the business and not just creaming off the profits and still maximise the tax benefits. If work hits a thin patch then you can maintain your level of dividend payment and reduce the investment side to compensate.

I've no idea if this is practical or not, just a random lunchtime thought.

[malvolio]

It's an ongoing argument. SJD, as accountants, will quite rightly propose the most tax efficient and legal option, which is NMW + dividends.

We cannot say for certain that this will attract more interest from Hector than a median salary structure (in fact, most of this debate has arisen from the S660a Arctic case, not an IR35 one), so it's your call. Personally, I have always gone for the higher salary / occasional divi route (partly becuase I have peaks and troughs in work but want a steady income) but I would be the last to suggest it was any sort of defence, more a mitigation factor - if I'm already paying something roughly halfway to IR35 tax levels, why bother investigating me? Plus I'm behaving like a real business in paying market(ish) rate and spreading profits as and when they are available.

SJD will support you either way and will give you sensible advice on how best to play it. If in doubt, ask them.

[Jefferson]

I received an info pack for SJD on Friday and whilst it looks good was a bit surpised to see their advice on salaries & dividend payments. They were basically saying pay yourself minimum wage & then draw the rest in dividends - Also said you can take dividends as often as you like without problems. I know this is an option, but probably not the wisest ways to do things if you don't want to draw too much attention to yourself?

[Jefferson]

Cheers for the advice.

[boredsenseless]

I'm using SJD. Not been with them long but they seem competent. Not the cheapest around but so far they have been worth it.

Company formation is something you can do yourself, so shop around for the cheapest agent to use for it. Costs vary between £50 and £150. It's even cheaper if you go direct to companies house but takes a lot longer because private individuals can't use the automated interface to do it all online.

Same goes for VAT registration and getting a company bank account. Just depends on how much leg work you want to do yourself rather than pay someone else to do it for you.

I set my company up via www.quickformations.com. They charge £41.11 to allow you access to the electronic submission gateway and it took 5 hours from start to receipt of electronic imcorporation certificate.

[Jefferson]

Thanks DaveB - A much appreciated proper explanation.
Good weekend all...

[DaveB]

Thanks all for your advice.
Spoke to "Just Contracting" - Very helpful & sounded on the case - will setup your company free & Vat register etc, but charge £120 p/month.
Told them that there were more expensive than most and there response was that all their staff were fully qualified chartered accountants....?

What you want to be asking them is if they are all fully qualified Chartered Tax Advisors. There is a big differance. A chartered accountant will have taken an exam in tax accountancy as one of 6 they have to pass to gain chartered status with the ICAEW but it's still a general qualification. A Chartered Tax Advisor will have specialist qualifications in taxation from the CIOT, a prerequisite for which is holding the ICAEW qualification.

If your accountants are simply Chartered Accountants they will *probably* be able to handle your tax for you but may come unstuck if you get major IR35 Issues for example. a CTA will almost certainly be able to handle anything that comes your way with regard to taxation.

All the gruesome details can be found here

http://www.freelanceuk.com/tax_advice/1146.shtml

[~Craig~]

Jefferson, Malvolio has spoken and he is rarely wrong

[Jefferson]

Thanks all for your advice.
Spoke to "Just Contracting" - Very helpful & sounded on the case - will setup your company free & Vat register etc, but charge £120 p/month.
Told them that there were more expensive than most and there response was that all their staff were fully qualified chartered accountants....?