Advice on tax / dividends etc

harveys_gardener

Find it hard to sympathise with the tax plight of those being paid over £100k.

jac52

redman said:

Addickted said:

SporadicAddick said:

Apologies if that link doesn't provide content. Try this one instead

https://www.telegraph.co.uk/finance/personalfinance/tax/10828657/Tax-system-flaws-leave-professionals-paying-60-per-cent.html

To be honest, I'm being slightly hypocritical as I utilise 'salary sacrifice' to boost my pension pot and reduce my tax, but I do know that at least this will be taxed when I start to draw it down.

Firstly this is incorrect. You do not reduce tax by doing salary sacrifice, you only save National Insurance. You may save the problem of having to pay tax and then reclaim it depending on how everything is set up.
Secondly I don't consider it hypocritical. Successive governments have continually put and tightened limits on pension tax benefits.The salary sacrifice is something that is widely used by most employers and is well known and accepted by governments.

Your employer also saves on having to pay Employers NI

LenGlover

jac52 said:

redman said:

Addickted said:

SporadicAddick said:

Apologies if that link doesn't provide content. Try this one instead

https://www.telegraph.co.uk/finance/personalfinance/tax/10828657/Tax-system-flaws-leave-professionals-paying-60-per-cent.html

To be honest, I'm being slightly hypocritical as I utilise 'salary sacrifice' to boost my pension pot and reduce my tax, but I do know that at least this will be taxed when I start to draw it down.

Firstly this is incorrect. You do not reduce tax by doing salary sacrifice, you only save National Insurance. You may save the problem of having to pay tax and then reclaim it depending on how everything is set up.
Secondly I don't consider it hypocritical. Successive governments have continually put and tightened limits on pension tax benefits.The salary sacrifice is something that is widely used by most employers and is well known and accepted by governments.

Your employer also saves on having to pay Employers NI

Which is the real reason they offer it.

robinofottershaw

HardyAddick said:

Entrepreneurs relief if you close down the company is 10% of any net drawings. Up to £25k an accountant can do it. Over 25k and an insolvency practitioner has to do it. I would talk to an accountant.

Agree. Claiming Entrepreneurs Relief is extremely tax efficient when closing down a company such as the one described further above. Quite a few accounting firms have people who are qualified insolvency practioners. Negotiate a fixed fee. As a qualified accountant I was comfortable doing a lot of the work to close down my wife's consultancy company when she returned to salaried employment in industry, including claiming Entrepreneurs Relief on her self-assessment tax return, but needed an insolvency practioner to handle the winding down of the company.

cafcpolo

robinofottershaw said:

HardyAddick said:

Entrepreneurs relief if you close down the company is 10% of any net drawings. Up to £25k an accountant can do it. Over 25k and an insolvency practitioner has to do it. I would talk to an accountant.

Agree. Claiming Entrepreneurs Relief is extremely tax efficient when closing down a company such as the one described further above. Quite a few accounting firms have people who are qualified insolvency practioners. Negotiate a fixed fee. As a qualified accountant I was comfortable doing a lot of the work to close down my wife's consultancy company when she returned to salaried employment in industry, including claiming Entrepreneurs Relief on her self-assessment tax return, but needed an insolvency practioner to handle the winding down of the company.

You won't qualify for ER unless the company has been trading for at least a year.

razil

Professional and training fees: I pay a few k a year for the privelege of doing my phd, one of my jobs requires I be on a phd course, does that mean I can offset for tax?

kentaddick

razil said:

Professional and training fees: I pay a few k a year for the privelege of doing my phd, one of my jobs requires I be on a phd course, does that mean I can offset for tax?

If you're working through a LTD company and it's paying for your phd, yes. Although - I'm not an accountant, ask an accountant.

IdleHans

Generally the rule was if it's required by the employer then no, but if it's required by the employment then yes.
A fine distinction but a distinction nonetheless. 

But @kentaddick is right re the limited co point - paying for training that way is very tax efficient.

razil

tax return, as working for two companies

StigThundercock

generally the acquisition of new skills by the self-employed is disallowed as a business expense for tax purposes, where the maintenance of applicable knowledge/professional standards can be allowable.
payment of such costs obo employees by employers may well be tax deductible for the employer but may then fall foul of Benefit In Kind tax & NI

assessment of the likelihood of HMRC asking any difficult questions should these outgoings be recorded as business costs, is something you would have to make yourself, be sure to have documentary backup and a clear narrative 

the test is "wholly and necessarily for the purpose of the trade"

johnnyhumphrey

Wholly,exclusively and necessary for an employee to claim tax relief.
Wholly and exclusively for a company,trade or employer.