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Ltd Company - (Money)

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    #21
    Originally posted by MPwannadecentincome View Post
    If you need more money and the co. has it then either pay more dividends less the corp tax or take as PAYE with normal tax and NI deducted. What is the problem?

    What do you mean by that?

    my accountant says iam allowed to take £500* 12 = 6000 and £2000 * 12 = 24,000 thats it..

    how do i take more dividents? iam assuming the bottom line is £24,000 + £6000 = £30,000/year...

    anyway guys, thanks very much for all the comments...

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      #22
      Originally posted by wasiter View Post
      What do you mean by that?

      my accountant says iam allowed to take £500* 12 = 6000 and £2000 * 12 = 24,000 thats it..

      how do i take more dividents? iam assuming the bottom line is £24,000 + £6000 = £30,000/year...

      anyway guys, thanks very much for all the comments...
      It all depends on how much your company brings in. If there is extra money past your current income (via the salary + dividends) after corporation tax/VAT you are free to take it (although you may need to pay additional taxes if you go over higher rate income tax level). My accountant makes me aware of my profits so it's quite easy to select the amount I want in dividend.

      Comment


        #23
        Originally posted by MPwannadecentincome View Post
        Interesting and highlights the variation between big co and little contractor...

        big co - may have a gym in the office or pays for gym membership at a local club - employee may have to pay tax on the benefit, but this would in effect be 40% of the cost (maybe higher when the new tax bands come in!). The big co will I bet be claiming all the memberships or cost of running the in-house gym as an expense (am I wrong?)

        little contractor - can't claim the gym costs - full stop.

        Not quite, if a big co has a gym in their building, there is no benefit-in-kind charge on the employee. The cost of setting up the gym is a real cost to the company (including flooor space) and yes they do get a corporation tax deduction for it.

        If then big co pays for employees gym membership (at a local club or otherwise - the club might be near to where the employee lives), then the cost of the gym membership is also deductible for corporation tax purposes, but in this case, the cost is a benefit-in-kind for the employee (and as you say the employee will pay tax on the value of that membership). But the company also has to pay 12.8% (currently) NIC on the cost of that benefit to HMRC.

        With regard to little contractor providing their services through their own Ltd co - the exact same rules apply.

        Comment


          #24
          Originally posted by wasiter View Post
          What do you mean by that?

          my accountant says iam allowed to take £500* 12 = 6000 and £2000 * 12 = 24,000 thats it..

          how do i take more dividents? iam assuming the bottom line is £24,000 + £6000 = £30,000/year...

          anyway guys, thanks very much for all the comments...
          Ok, so I really think that you shoudl read the first timers section as there seem to be some fundamentals that you lack here.

          One thing to remember is that it's your company and not your accountants and so you shoudl be telling him what you want to do and he shoud be advising you on teh most tax efficient way to do it.
          "Israel, Palestine, Cats." He Said
          "See?"

          Comment


            #25
            Originally posted by Bengal View Post
            Not quite, if a big co has a gym in their building, there is no benefit-in-kind charge on the employee. The cost of setting up the gym is a real cost to the company (including flooor space) and yes they do get a corporation tax deduction for it.

            If then big co pays for employees gym membership (at a local club or otherwise - the club might be near to where the employee lives), then the cost of the gym membership is also deductible for corporation tax purposes, but in this case, the cost is a benefit-in-kind for the employee (and as you say the employee will pay tax on the value of that membership). But the company also has to pay 12.8% (currently) NIC on the cost of that benefit to HMRC.

            With regard to little contractor providing their services through their own Ltd co - the exact same rules apply.
            Interesting, when I get my new office I must remember to kit it out with a gym at the same time!
            This default font is sooooooooooooo boring and so are short usernames

            Comment


              #26
              Originally posted by wasiter View Post
              What do you mean by that?

              my accountant says iam allowed to take £500* 12 = 6000 and £2000 * 12 = 24,000 thats it..

              how do i take more dividents? iam assuming the bottom line is £24,000 + £6000 = £30,000/year...

              anyway guys, thanks very much for all the comments...
              Change accountants and do a bit of reading up. If your accountant told you to take £5000* 12 = 60000 and £20000 * 12 = £240,000 would you do it? That's maybe an extreme analogy but YOU are responsible for knowing the rules because mark my words, HMRC won't hammer your accountant for getting it wrong - they'll hammer YOU
              Every Saint has a past, Every Sinner a future"


              Originally Posted by Pogle
              I wasnt really into men at the time - IYKWIM

              HTH

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