Signing on / salary during bench time

[dang65]

I think if things got really bad then I'd just take any old low-rate contract and keep paying myself the usual salary by tapping the reserves. At least the company would be getting some income, and I'd be working, and some of those low-paying gigs look really interesting - just not worth going for in normal circumstances.

[Mich the Tester]

For tax purposes you are a disguised employee and must pay pay pay.

For benefits purposes you are a digusting capitalist director, oppressing hard-working families, and therefore entitled to nothing.

Enjoy.

disgusting middle class capitalist director

Must be accurate you know.

[AlfredJPruffock]

I've often thought that there is no reason why this can't be used more and justifiably argued so. Although to do it for each contract is asking for trouble from Hector.

You could close your company citing the current economic climate and that you are considering a total change of career. Go and do a plumbing course, claim it wasn't for you after all when you installed a boiler which blew up, and start a limited again in a few months in your original field. "Needs must" and all that.

How can anyone say you didn't intend the change of career to work out? It's a perfectly plausible chain of events.

What a Wizard Wheeze !

[Chugnut]

Can you make yourself redundant and pay £30K as redundancy tax free - then close company sign on and start a new company up if you get another contract?

I've often thought that there is no reason why this can't be used more and justifiably argued so. Although to do it for each contract is asking for trouble from Hector.

You could close your company citing the current economic climate and that you are considering a total change of career. Go and do a plumbing course, claim it wasn't for you after all when you installed a boiler which blew up, and start a limited again in a few months in your original field. "Needs must" and all that.

How can anyone say you didn't intend the change of career to work out? It's a perfectly plausible chain of events.

[s2budd]

I continue to pay my salary regardless of if I am in a contract or not. Remember that your "job" is not working for the end client but working for your company.

During the last downturn I did make an attempt to signing on. It did not get very far and to be honest I could not be bothered. I did take a temping role though for a few weeks filling or emptying envelopes or something similar. The pay was p@nts but it got me out of the house and I quite enjoyed it.
However mind-numbing the temp role something silly like filling will still pay better and it gets you out of the house doing something different.

To sign on you will need to put the company into a state on non-trading (though you can still have stall charges against it such as accountant fees) and give yourself a P45 (or ask your accountant).

[BolshieBastard]

Can you make yourself redundant and pay £30K as redundancy tax free - then close company sign on and start a new company up if you get another contract?

Nope. Although contractor mythology recalls one contractor managing to do this.

[MPwannadecentincome]

You would have to be terminated by the company, rather than just not drawing any salary.

Can you make yourself redundant and pay £30K as redundancy tax free - then close company sign on and start a new company up if you get another contract?

[TheFaQQer]

Which leads me to wonder what rights, if any, a contractor has to claim JSA and whatever other handouts are available, when I'm on the bench? Would I have to not pay a salary during this time to be eligible? Does anyone understand the legalities and tax implications of this?
Just a pondering.

You would have to be terminated by the company, rather than just not drawing any salary.

[badger7579]

CC, I do exactly what you do, pay my salary regardless of bench time. As you say a large company continues to pay its employees even if profits are down (or sack them)

You are in full time employment via your Ltd therefore continue to pay to pay your salary. To my mind its part of the perks to contracting, having time off and still getting paid.

[chris79]

For tax purposes you are a disguised employee and must pay pay pay.

For benefits purposes you are a digusting capitalist director, oppressing hard-working families, and therefore entitled to nothing.

Enjoy.

lol, so true.

[DimPrawn]

For tax purposes you are a disguised employee and must pay pay pay.

For benefits purposes you are a digusting capitalist director, oppressing hard-working families, and therefore entitled to nothing.

Enjoy.

[Cheshire Cat]

Do other contractors continue to pay themselves a salary whilst on the bench, or do you sign on? Or neither?
Another contractor I work with at the client site was surprised when I mentioned I paid a salary month in month out, regardless of what the company is invoicing, so long as there are funds in the company account to do so.
My rationale is that other companies pay their staff regardless of what the company invoices. I understand that there is a grey area since I'm also the company's sole director. But since I'm paying myself a salary at all, I think it makes sense to continue to do so when I'm out of contract.

Which leads me to wonder what rights, if any, a contractor has to claim JSA and whatever other handouts are available, when I'm on the bench? Would I have to not pay a salary during this time to be eligible? Does anyone understand the legalities and tax implications of this?
Just a pondering.