Interesting chat with accountant

[buffdaddy]

...I setup my Ltd Co last week.

Just had a conversation with the accountant today. HE said its normal practice to pay urself a minimum wage salary, topped up with dividends. Keep the rest in the company. Two years later, if I close the company, its okay. I can recieve the funds and pay only 6% tax on it.

Is the above true.?

I tried searching the forums..but came up with nothing. Does someone have a link where i can read up on this interesting situation.

[Ruprect]

Read up on taper relief. you can do it, but taper relief is only granted at the discretion of HMRC, with the understanding that you are no longer going to be in business in this field, so if you did it every 2 years you may not be granted it [edit] subsequent times (you'll probably be granted it first time)[/edit].

[Lewis]

It might not be around for the next two years

http://www.shout99.com/contractors/s...le.pl?id=44222

[Bradley]

Avoidance

Read up on taper relief. you can do it, but taper relief is only granted at the discretion of HMRC, with the understanding that you are no longer going to be in business in this field, so if you did it every 2 years you may not be granted it [edit] subsequent times (you'll probably be granted it first time)[/edit].

http://www.hmrc.gov.uk/manuals/ctmanual/CTM36875.htm
Paragraph e refers

You'd have to stop trading through a company for at least a year and be able to prove that you had no intention of contracting again when you closed down the old company.