[Marc Stock]

Got a question. My tax is getting horrendous now. As I am making more money year on year I need to find an effeciant way of reducing my household tax bill

Wife wants in on the business too (please no jokes about payments in kind) and I think it would be good if we can form a parynership to take advantage of her tax allowance too.

I haven't done the return yet but can I just get her to register as self employed and both fill out returns for this last tax year as a partnership?

[PoleKing]

Yeah, it's only 3 months retrospective though.
To use her full allowance you'd have to pay her £3k per month for the last 3 months.

[Ian Lancaster]

My wife and I are co-directors of our Limited Company.  We are paid a salary each from the company on which we pay tax and national insurance, and the company pays employers NI contributions.  The salaries are set just above the tax free allowance level so that we pay minimal NI and tax.  The remainder of the company profits we take as dividend which is taxed as Corporation Tax.

I don't know exactly how it adds up, but our accountant assures us it is the most tax efficient way of doing it.

I put away a certain amount each week to cover Corporation Tax and my accountant sends me our payslips every month so I can pay our PAYE.

Works well for us, I've paid this years Corporation Tax and I've already got enough put by to pay next years, not due till next January.

[Marc Stock]

OK Ian thanks

[dannymack]

Marc my Tax bill twice a year was high. We went ltd myself and my wife are directors which our tax bill is soooo much lower 👍

[8weekly]

Why would you want Spruce as a business partner?

[Spruce]

Why would you want Spruce as a business partner?

 

[[GQC] Tim]

Yeah, it's only 3 months retrospective though.
To use her full allowance you'd have to pay her £3k per month for the last 3 months.

One of my friends wife is a so called sleeping or silent partner and he says he can use her full personal allowance.......always wondered how this works.  

[Total shine cleaning services]

Hi Marc

Some good advice there, I would definately go the ltd company route, make sure you get a good accountant tho as they can save you what they cost and there is a lot more to it than being a sole trader.

Graham

[PoleKing]

My accountant said its worth going ltd @£30k(ish) T/O.
Personally, I couldn't see it being worth it until about £50k but at £80k it's about £6k better from what I could work out.
Just my 2 bobs worth.

[8weekly]

My accountant said its worth going ltd @£30k(ish) T/O.
Personally, I couldn't see it being worth it until about £50k but at £80k it's about £6k better from what I could work out.
Just my 2 bobs worth.

What is the benefit in cash terms? I had always thought it was pretty pointless until you employ. I am guessing you can pay yourself in dividends but I would think that would only be beneficial if you are declaring profits over £40k? Soooo... I guess it would be pretty marginal until £50k or so with the added accountancy costs?

[PoleKing]

My accountant said its worth going ltd @£30k(ish) T/O.
Personally, I couldn't see it being worth it until about £50k but at £80k it's about £6k better from what I could work out.
Just my 2 bobs worth.

What is the benefit in cash terms? I had always thought it was pretty pointless until you employ. I am guessing you can pay yourself in dividends but I would think that would only be beneficial if you are declaring profits over £40k? Soooo... I guess it would be pretty marginal until £50k or so with the added accountancy costs?

Not sure what you mean-cash terms.
Self employed you pay 29% tax & NI. After £10k and Upto £31k. 49% Upto £150k but VAT @£81k.
Ltd pays 20% flat rate corporation tax on profits. (A dividend cannot be taken to reduce profit)
Pay yourself £10k dividend to £31k NI is a couple of quid a week on minimum wage (which you'll be on-wagewise)
Yeah, £40k saves a bit. £50k saves a bit more.
£81k saves quite a bit more.
Accountancy-you'll do well to find one who'll do 2 directors and all the companies paperwork for less than a grand.

[lee_dewing]

Offer custies a discount for cash.

Those are the custies you've lost due to the worst recession ever

Tax goes down

As said ltd is the way to go more complicated i really don't earn in that league and I think that can be the problem with employing and expanding.

My mate use to have a garage and got into serveare problems with the tax man his thought.

I think sole trader is a simple life but i'm not that ambitious.
Good luck Marc.