Ltd company advice

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Bill90.

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Hi, would anyone care to add to my below list of pros and cons. Looking at about 30k profits. All lower tax bracket used up. Any tips or advice appreciated.


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T McGibney said:
Apart from the voucher point, all of your "pro" points are highly dubious.

It's generally not worth having a company for a business with 30k annual profit.

Why would a taxi operator need a home office?
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How are they highly dubious?.

Wanting to pay less tax and have more in retirement once within the legal framework is absolutely the best thing to do.

I operate tours and need a laptop, printer, electricity, phone, WiFi ect. Would this not be considered a home office?.

Nothing would be "made up".

Everything accounted for ect.

Just as I am now only within a limited company.

I really can't see how this would be considered highly dubious?.

30k profit as sole trader, max pension contribution is 6k so 24k left to be taxed at 50% means 12k in tax.

Limited company say 2k a month pension contribution for 25 years at 8% until I retire leaves a pension pot of 1.7 mill.

Sole trader I would have a pension pot of 400k and an extra 12k a year in disposable income until then.

Big difference.

Obviously numbers will change over the years but that's a rough idea based on today.

Also scope to expand whereas its totally pointless expanding as a sole trader giving 55% of profits away over 100k.

Now please tell me what's highly dubious about that????
 
Bill90. said:
How are they highly dubious?.
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They're each based on nebulous or counterproductive assumptions.

Paying a dividend for example will increase your tax burden, not reduce it.

Bill90. said:
I operate tours and need a laptop, printer, electricity, phone, WiFi ect. Would this not be considered a home office?.
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Yet your query referred to operating a taxi as a limited company.

Are you trolling?
 
T McGibney said:
They're each based on nebulous or counterproductive assumptions.

Paying a dividend for example will increase your tax burden, not reduce it.


Yet your query referred to operating a taxi as a limited company.

Are you trolling?
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I think you're trolling tbh.

I said paying a dividend if needed meaning I'm not totally excluded from the money in the company should anything happen my rental income. I wouldn't be taking a dividend unless I needed to which is unlikely.

Someone with an Spsv license can do various amounts of different work. It's not all just sitting in a taxi at a rank drinking coffee. I don't actually to any traditional taxi work. Its all contracted works and sessional tours.

I still can't see what you consider "highly dubious" about this?.

My account want's to meet to talk about it but initially he doesn't see anything wrong with my proposal?.

Would love to hear a few different opinions tho if anyone has any?.
 
Looks fine to me , a couple of points

- Dividends are not tax-deductible so just take any additional income as regular salary and pay tax.
- I wouldn't consider "less disposable income" as a con of a ltd company. It is a decision you are making for future betterment.
 
Bill90. said:
I still can't see what you consider "highly dubious" about this?.

My account want's to meet to talk about it but initially he doesn't see anything wrong with my proposal?.

Would love to hear a few different opinions tho if anyone has any?.
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Any questions?
 
Savvy said:
Looks fine to me , a couple of points

- Dividends are not tax-deductible so just take any additional income as regular salary and pay tax.
- I wouldn't consider "less disposable income" as a con of a ltd company. It is a decision you are making for future betterment.
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Great to hear. Thanks for the tip. Greatly appreciated.
 
The company paying CT on profits and then the company distributing profit as dividends and the individual paying tax on that makes it less tax efficient than taking salary

The company can't contribute to a pension in excess of wha would provide you with 2/3 of your salary in retirement, amd you're not taking a salary.

You could split the company revenue after costs into salary and pension.

If you're a tour operator, you could probably justify home office expenses.
 
time to plan said:
The company paying CT on profits and then the company distributing profit as dividends and the individual paying tax on that makes it less tax efficient than taking salary

The company can't contribute to a pension in excess of wha would provide you with 2/3 of your salary in retirement, amd you're not taking a salary.

You could split the company revenue after costs into salary and pension.

If you're a tour operator, you could probably justify home office expenses.
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Yes point taken about the dividend. Thanks.

Didn't they change that pension rule to allow unlimited pension contributions?
 
time to plan said:
The company can't contribute to a pension in excess of what would provide you with 2/3 of your salary in retirement, amd you're not taking a salary
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Completely wrong, but said with complete conviction, making it all the more dangerous.

The plan sounds okay to me, other than the dividend point, but you’d just take additional salary if you needed money and it’d be deductible for corporation tax purposes.

There’s also the flexibility to employ a spouse and get additional 20% rate band if the employment is legitimate.
 
Gordon Gekko said:
Completely wrong, but said with complete conviction, making it all the more dangerous.

The plan sounds okay to me, other than the dividend point, but you’d just take additional salary if you needed money and it’d be deductible for corporation tax purposes.

There’s also the flexibility to employ a spouse and get additional 20% rate band if the employment is legitimate.
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Somewhat hysterical to call it dangerous. Happy to be corrected if out of date or otherwise wrong.
 
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