Income Tax

[Bazza-old]

i employ my wife and pay her £25k a year, she gets taxed at 23%

but its 25k im not paying 40% on, so in theory i can earn 50k and still be taxed at 23%

Wasn't there something in the gold forums about this kind of thing ?

TaxMan had latched onto it and gave someone a huge backdated bill or something ?

cant say i read it

but this was all done legit

on advice from certified accountant

i am classed as a sole trader ,i know there is a lot of differences to a LTD company

Here it is ...

http://www.goldmembers.co.uk/loc/forums/vi...topic.php?t=769

Read it and weep

On the plus side, seems as though 'gold members' may be able to avoid it

that is all about a limited company

it is a different thing altogether

i am the only person as such

my wife is just like another employee

only her wages go into the same houshold

[UltraViolet]

then claim 40 p back from IR as allowable expense on my personal tax which offsets the "profit" calc from the .25 p a mile.........

Don't forget you can only claim this amount on the first 10,000 miles.......

Oh and the chap who thinks if you are earning £40k a year, you pay the same tax as the millionaire ..... it is percentage don't forget - on the top slice too. So the millionaire total percentage will still be higher than that of someone on £40k a year. (Assuming both paying on all earnings PAYE)

A Ltd company does have very different rules to a Sole Trader or partnership - but not always better. Certainly more red tape!

[Fidgits]

Personally, I think the tax variations are too 'hard stop'...

It would be much better to have many more 'smaller' increases...

Just my 2 cents...

[DaveEllen]

then claim 40 p back from IR as allowable expense on my personal tax which offsets the "profit" calc from the .25 p a mile.........

Don't forget you can only claim this amount on the first 10,000 miles.......

Oh and the chap who thinks if you are earning £40k a year, you pay the same tax as the millionaire ..... it is percentage don't forget - on the top slice too. So the millionaire total percentage will still be higher than that of someone on £40k a year. (Assuming both paying on all earnings PAYE)

A Ltd company does have very different rules to a Sole Trader or partnership - but not always better. Certainly more red tape!

cheers I know that.........hopefully i will not be doing that many..........if I do will need another lex...........mmmmmmmmmmmmmmmmmmmmm gs43 0

[Monster-Mat]

at this stage i personally dont care about taxation, as i dont pay any import tax, or Vat on cars, fags or alcohol.

wait however till i come back to the UK

[Bazza-old]

at this stage i personally dont care about taxation, as i dont pay any import tax, or Vat on cars, fags or alcohol.

wait however till i come back to the UK

no wonder our taxes are so high :D

[Monster-Mat]

but i work for the privelidge of not paying them

[Bazza-old]

but i work for the privelidge of not paying them

but your boss pays them :winky:

[Monster-Mat]

not really shes a sour old bat

[Matthew_McNally]

I am classed as a sole trader ,i know there is a lot of differences to a LTD company

absolutely.

no limited liability to start with.

you run up debts / go bancrupt etc - then you can loose the house, the car, personal savings etc etc.

the biggest advantage of limited company is limited liability.

in case of things going wrong - your liability is limited to the assets of the company.

[DaveEllen]

if you've got a ltd company make sure u get it drawn up correctly..........if you do go bust creditors can get the pension fund your company has put by for u.............

[Matthew_McNally]

if you've got a ltd company make sure u get it drawn up correctly..........if you do go bust creditors can get the pension fund your company has put by for u.............

have you got a source for this Dave?

doesn't sound right to me - the pension fund is not an asset of the company - it should be in your name?

not calling you a liar mate ( :D ) - just want to have a read up on it.

[greeneyes]

personally I've only ever found one reason to pay any tax, and that is....

The State will kill me if I dont!

I'm happy to privatise EVERYTHING except the Police, Justice and Defence systems, and run those from the profits of a National Lottery or similar.

Maybe if I had ever met a bureaucrat who actually COULD run my life better than me I would think differently, but I'm kinda happy making my own mistakes and profiting from them.

NZ has 39% max tax rate on income over $60,000

[MsW]

It seems to me that the 40% tax rate has been around for as long as I can remember at roughly the same threshold.

Not that many years ago, the top rate was 98%, don't know what the threshold was, so a lot of the top earners (it was mostly pop and rock stars) left the country - spending only so many days a year here

So in effect the taxman lost everything from them

[DaveEllen]

if you've got a ltd company make sure u get it drawn up correctly..........if you do go bust creditors can get the pension fund your company has put by for u.............

have you got a source for this Dave?

doesn't sound right to me - the pension fund is not an asset of the company - it should be in your name?

not calling you a liar mate ( :D ) - just want to have a read up on it.

Matt - My accountant mentioned it when setting up my company. PM me for his details if you want to talk to him........

If i remember right its to do with the articles of association and relates to the company part of the pension scheme......

Cost £400 for him to do all the work........

He also told me that whenever i pay myself a dividend I have to have a board meeting and my wife has to "sign over" her share of it........

Hope it helps

[Matthew_McNally]

If i remember right its to do with the articles of association and relates to the company part of the pension scheme......

I'll check through my AoA - but pretty happy that this would not effect me.

I would simply port my current exec pension to a private pension (should things go b00bies skywards) - making it entirely my property.

SWMBO pension is a stakeholder scheme, in her name - the company only contributes.

Cost £400 for him to do all the work........

ouch - setup about six years ago - cost just over ton.

He also told me that whenever  i pay myself a dividend I have to have a board meeting and my wife has to "sign over" her share of it........

you don't need a meeting - just the minutes of the meeting.

what do you mean your wife signs over her share?

if your wife has share capital in the company - which she gives back to you - you should seriously read this thread about section 660 of ICTA - the revenue are hunting this sort of arrangement down.

[DaveEllen]

cheers Matt will look at this thread.

However my wife is only a director as we need 2 people for a LTD co........

I'd prefer to be a sole trader but agencies I go thru will only deal with LTD co's...........

BTW what does your co do ?