contractor investment options

[curiousman]

Hi Guys,

I have recently started contracting in the uk and I am looking to minimize my tax liabilities.
I am a director of my limited company and only employee (Owner/director). I am working contracts and plan not to take a salary over 8331 out of the company.
I have a build up of savings so I do not need to take money out of the company.

I am wondering which sort of schemes are the most advantageous, both on a company level/ personal level.

ISA,Pension,SIPP, Stocks, Loans, SPV.


Providers / schemes links/sources much appreciated

[northernladuk]

Hi Guys,

I have recently started contracting and I am looking to minimize my tax liabilities.
I am a director of my limited company and only employee (Owner/director). I am working contracts and plan not to take a salary over 8331 out of the company.
I have a build up of savings so I do not need to take money out of the company.

I am wondering which sort of schemes are the most advantageous, both on a company level/ personal level.

ISA,Pension,SIPP, Stocks, Loans, SPV.


Providers / schemes links/sources much appreciated

I don't think you need to worry about all that at this rate. Your main focus is a war chest. You need to build up 6 months plus at a stanard of living you are happy with, possibly more. We are talking 30 to 40k spare not including your tax liabilities. Once you've got that then you can start putting in to a Sipp and looking at other investments but that won't be soon.

As you can imagine this is asked by most newbies so when you are ready trying using the search method explained in the FAQ section.

[curiousman]

Well I've been contracting for 10 years, just not in the UK so that's not really an issue ...

[Lance]

ISA,Pension,SIPP, Stocks, Loans, SPV.

Any personal investments will involve you taking money (and paying tax).
The only tax free options you have are pension/SIPP.
If you invest the company's money, then you'll have CT to pay, as well as more tax to get it out (and potentially CGT if your company becomes an investment vehicle -not sure as it's not my area of expertise).

No matter what, I'd suggest you take out dividends anyway to the higher rate threshold as that's the least tax to pay. And stick that in an ISA (or if you like a return on your money somewhere else). Zopa is quite good.

After that I'd throw it at a pension. But that's me. Not you. A pension suits my age, lifestyle and other personal considerations.


What you need is an IFA, who can understand your goals, your current savings, your age, and help you plan something useful. Rather than 100+ opinions from the internet, of people who can't even agree if gladiators is a good movie.