ir59i - flatten company bank account ir59i - flatten company bank account
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  1. #1

    kobie2

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    Default ir59i - flatten company bank account

    Hi,
    I need some help here -
    We run our company with a credit balance in the bank. At the start of the year we
    give all the directors salary/dividends or only dividends so we all stay under the 40%
    tax bracket. Our company was not liable for IR35 so with the introduction of ir591
    are we better flattening the cash reserves and taking the exta personal tax hit or
    just keep doing what we do and pay the 8% extra next year?

    Thanks
    Kobie.

  2. #2

    Mordac

    Guest

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    I guess we won't know the answer to that one until after the Budget, when we *may* find out exactly what IR591 entails.
    One of the accountants will probably be along shortly to confirm. What does your accountant say?

  3. #3

    kobie2

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    Default

    brevity is not his middle name but it lI belive that he said that if we take it out now then we will pay an extra 22.5-8=14.5%.
    Where the 22.5 is the difference between standard and upper tax limit and 8% is the ir591 %age.
    Kobie

  4. #4

    Mordac

    Guest

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    Where did he get the IR591 %age from? No details have been published afaik, only "proposals".

  5. #5

    kobie2

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    Assumption I believe - 8% is what sole traders pay, plus 1% when the hit 40%.
    I think I maybe too early with this question but I'd like to start planning just in case.

  6. #6

    FamosAmos

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    My accountant seems to think it will be 8%; probably some ICAEW newsletter suggesting so. Still a complete guess at the mo but not long to wait!

  7. #7

    www 1staccountancy biz

    Guest

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    The 8% is pure speculation but it's what we're expecting.

    No-one will really know for sure until March 17th.

    Darren

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