Originally posted by oilboil
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Bounce back tax
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Originally posted by oilboil View PostIf you are a more traditional company that requires more than just you to make money this spending it on payroll makes sense. You can't get out of COVID cash-constraints because you can't pay your staff to make your widget, and you can't sell your widgets because you've no money to pay the staff to make them. The loan just alleviates one side of the problem. If your business is otherwise viable, you will be able to sell the things you build with the loan cash and everything eventually gets back to normal.
The other option of course is to take your £25,000 (based on a one-man limited IT consultancy turning over £100k), immediately turn it round as a £25k salary payment (incurring between £3-£10K in tax and NI - depending on other payments you make this year) then bankrupt the company and go out of business. It's essentially a £25K grant so long as you have no plans to use the company again
What legitimate reason would a business have for issuing such a large bonus to an employee when they have lost their revenue stream. Maybe you can come up with some creative rationale or just hope it never get queried.Comment
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Originally posted by oilboil View PostIf you are a more traditional company that requires more than just you to make money this spending it on payroll makes sense. You can't get out of COVID cash-constraints because you can't pay your staff to make your widget, and you can't sell your widgets because you've no money to pay the staff to make them. The loan just alleviates one side of the problem. If your business is otherwise viable, you will be able to sell the things you build with the loan cash and everything eventually gets back to normal.
The other option of course is to take your £25,000 (based on a one-man limited IT consultancy turning over £100k), immediately turn it round as a £25k salary payment (incurring between £3-£10K in tax and NI - depending on other payments you make this year) then bankrupt the company and go out of business. It's essentially a £25K grant so long as you have no plans to use the company again
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Originally posted by elsergiovolador View PostA company can't make profit while providing service "inside IR35", it's impossible.
See You Next TuesdayComment
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I see Starling bank has had to borrow £300M as ran out of money to deliver bounce back loans, I predict they close applications fiverr even in next few days
Same for tide, they are going live this week, I predict 2 days for them
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Originally posted by GhostofTarbera View PostI see Starling bank has had to borrow £300M as ran out of money to deliver bounce back loans, I predict they close applications fiverr even in next few days
Same for tide, they are going live this week, I predict 2 days for them
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Either way, I doubt any banks would have problems getting seed funds / source funds as the risk is minimal, being effectively insured by the gov't.
MComment
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Originally posted by mjcp View PostAren't they funds for the loans the Gov't owned British Business Bank Plc? Or is it just they who guarantee any loans issued under the Bounce back scheme?
Either way, I doubt any banks would have problems getting seed funds / source funds as the risk is minimal, being effectively insured by the gov't.
M
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In my opinion, for short term personal funding(which is pretty much the only reason a LtdCo contractor would use the BBL) is that a director's loan is the most cost-effective way of getting the money out.
Paying it out as a salary means a nasty bit of tax, all for some short term financing. Dividends obviously incur less tax but you still are still possibly paying thousands of tax just to have some cash in your pocket now that you need to pay back in the future.
Not sure if I'm missing something here or if there is another better way of doing it?Comment
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Originally posted by jamed View PostIn my opinion, for short term personal funding(which is pretty much the only reason a LtdCo contractor would use the BBL) is that a director's loan is the most cost-effective way of getting the money out.
Paying it out as a salary means a nasty bit of tax, all for some short term financing. Dividends obviously incur less tax but you still are still possibly paying thousands of tax just to have some cash in your pocket now that you need to pay back in the future.
Not sure if I'm missing something here or if there is another better way of doing it?Comment
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Originally posted by Old Greg View PostYou personally owe the company money, so not as easy to walk away from the company and its debt.
Just saying like
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