Something to worry about?

[Dong]

Something to worry about? Thought some here might be interested...

Contractors who work through their own limited company may face a backlash over any dividend payments they make to themselves, an expert has said.

Paul Spindler, technology partner at chartered accountants Kingston Smith, warned that contractors should consider the repercussions of having a low salary and high bonus payments should HM Revenue and Customs (HMRC) decide to investigate.

Speaking to industry site Contractor UK, he cited a recent case in which a contractor working through a limited company argued that dividend payments were part of a bonuses scheme and therefore could not be subject to PAYE or National Insurance.

HMRC disagreed with the contractor, adding: "The employees received their dividends not by reason of holding shares but because of their employment with the company."

The tax tribunal added that it is possible for dividend payments to be classified as both a bonus and as income.

Contractors have been subject to a number of recent financial changes, with the Financial Services Authority proposing to bring an end to self-certified mortgages.

http://www.excelliumumbrella.com/new...hp?id=19422889

[Churchill]

I wonder who you work for...

FFS!

[Moscow Mule]

I wonder who you work for...

FFS!

Same story was in the ContractorUK newsletter.

[Clarky]

FFS +1

If the divi had done the divi properly in the first place (i.e. had shares AND declared them as dividends properly) he probably wouldn't be in that situation.

[threaded]

FFS +1

If the divi had done the divi properly in the first place (i.e. had shares AND declared them as dividends properly) he probably wouldn't be in that situation.

Yes, a tip for newbies: accountants may seem expensive, but never look on them as a cost, but at how much they will save you.

[Dong]

Same story was in the ContractorUK newsletter.

Oh? Sorry - don't get that newsletter, only get the one that I attached. Attached cause thought you guys might want to know where I got the info.

So old news then? Hmm, will have to think of a new topic. Geez - you guys are hard to please.....

[EternalOptimist]

blooming heck, just heard

the Beatles are splitting up

[Clarky]

Oh? Sorry - don't get that newsletter, only get the one that I attached. Attached cause thought you guys might want to know where I got the info.

So old news then? Hmm, will have to think of a new topic. Geez - you guys are hard to please.....

We only come across harsh as you quoted it and put a link to an umbrella company at the end... it gives the impression that you're trying to sell their services, and as you only have 20 posts it makes it more likely that you a) joined the forum, b) post some normal type stuff to get in with the crowd and then c) pow, in with the company recommendations you have a link with.

If you've nothing to do with them fine, but we're a cynical bunch...!

[Clarky]

Yes, a tip for newbies: accountants may seem expensive, but never look on them as a cost, but at how much they will save you.

Exactly! Same goes for PI, Insurance etc...

[Sysman]

We only come across harsh as you quoted it and put a link to an umbrella company at the end... it gives the impression that you're trying to sell their services, and as you only have 20 posts it makes it more likely that you a) joined the forum, b) post some normal type stuff to get in with the crowd and then c) pow, in with the company recommendations you have a link with.

If you've nothing to do with them fine, but we're a cynical bunch...!

WHS +1