I've been made a perm offer I'm thinking of taking, but while I'll no longer be contracting if I do, I/the business will still service a few freelance clients until at least the end of the tax year -- just in case things don't work out and to fulfil various obligations.
The problem (if you can call it that) is what to do with the distributable income still in the business. Taking it all as dividends this year and next will mean paying higher-rate tax and while I have uses for the money, I don't need it *that* badly.
So pending a conversation with my accountant, what are the sensible options? Sticking the money in a business savings account for a rainy day seems to be delaying the inevitable for little benefit, so a tax-efficient siphon into a SIPP seems like a better choice -- but also means little or no accessible funds should permie life be short-lived.
Alternatively, I could close the company via MVL this year and claim entrepreneur's relief (no problem with my set-up) -- but will then operating as a sole trader count as starting a new business? And that would also screw things up if I do need to make a hasty return to contracting. So maybe just moving the money into a savings account and sitting tight until April next year to use MVL would be no bad thing -- I should know by then if the change is bearable...
Anyone else had to make this kind of decision? (This similar thread fizzled out...)
The problem (if you can call it that) is what to do with the distributable income still in the business. Taking it all as dividends this year and next will mean paying higher-rate tax and while I have uses for the money, I don't need it *that* badly.
So pending a conversation with my accountant, what are the sensible options? Sticking the money in a business savings account for a rainy day seems to be delaying the inevitable for little benefit, so a tax-efficient siphon into a SIPP seems like a better choice -- but also means little or no accessible funds should permie life be short-lived.
Alternatively, I could close the company via MVL this year and claim entrepreneur's relief (no problem with my set-up) -- but will then operating as a sole trader count as starting a new business? And that would also screw things up if I do need to make a hasty return to contracting. So maybe just moving the money into a savings account and sitting tight until April next year to use MVL would be no bad thing -- I should know by then if the change is bearable...
Anyone else had to make this kind of decision? (This similar thread fizzled out...)
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