Advise

[amolkarnik]

All

I have been a contractor for many years now. Worked for a while through my own limited company and then went off to work through an Offshore company scheme, which is now being wound down due to the new MSC legislation.

I have been speaking to a few accountants to get a feel for what way of working would work best and thats left me a bit confused.

1. Low salary, high dividend (to top rate of tax). Leave the rest in the company. Shut down the company in 3 years, and take the retained earnings as a capital redistribution with taper relief applied. potential to take home around 75%. Downside - I need to take home more than the 35k odd that I;d be able to this way.

2. Low salary and dividends to leave little or no retained earnings in the company. I get control of the money immediately but pay tax instead. net take home would be around 65-68%.

3. Opting for a system halfway between 1 & 2 looks like the only feasible option, unless I am missing someone.

Any opinions? Any recommendations on good accountants?

Amol

PS - My contract is outside IR35.

[MarillionFan]

Argahhhhhhhhhhhhhhhhhh!

[THEPUMA]

Do you have such a useful thing as a spouse who isn't a higher rate taxpayer?

[amolkarnik]

Unfortuntely not. She's sitting just under the top rate threshold.

[THEPUMA]

Then I think the only feasible option is to go with your option 3. You could consider loaning yourself the surplus over £35K, then repaying shortly before your liquidation (with a very short-term loan) but that is fraught with all sorts of difficulties so personally I would just minimise your drawings over £35K and take the 25% hit.

Oh and I recommend myself as a good accountant ([email protected]).