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What's the point in setting up a company and paying dividends?!

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    #11
    Originally posted by Novice View Post
    Thanks to all of you for your words of wisdom. We don't pay salaries (not enough profit unfortunately) so PAYE/NI considerations are out. And we don't hold the property in the company, we rent it (cheaply, again due to not much profit) from the shareholders/directors. So the ltd company is effectively a booking agent. As I understand your posts, there's no point in paying a dividend. Even if we make the basic rate tax payer the sole shareholder we still pay 20% CT on the profits versus paying her the £2000 for doing the administration and her paying 20% income tax...
    Who told you to set it up this way? Did they not go through all this with you?
    'CUK forum personality of 2011 - Winner - Yes really!!!!

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      #12
      Originally posted by Novice View Post
      Thanks to all of you for your words of wisdom. We don't pay salaries (not enough profit unfortunately) so PAYE/NI considerations are out. And we don't hold the property in the company, we rent it (cheaply, again due to not much profit) from the shareholders/directors. So the ltd company is effectively a booking agent. As I understand your posts, there's no point in paying a dividend. Even if we make the basic rate tax payer the sole shareholder we still pay 20% CT on the profits versus paying her the £2000 for doing the administration and her paying 20% income tax...
      I'm not following you. You have a contracting company that pays no salary because it's not making enough profit? What does your limited company do?
      Contracting: more of the money, less of the sh1t

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        #13
        Originally posted by kingcook View Post
        I'm not following you. You have a contracting company that pays no salary because it's not making enough profit? What does your limited company do?
        try reading the OP....

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