Chartered Accountants and Business Advisers

Trading through a limited company can be tax efficient for the extraction of profits. As a shareholder in your business you can pay yourself in the form of dividends (from retained profits after tax) which do not attract either employee or employer’s national insurance (at the moment!!).

We normally allow 24 hours but in most cases it can be quicker.

We can take over the administration for you and look at tax-efficient ways of extracting income for you and your family.

As a general rule it is ok to pay your spouse a small salary but:-the amount must be reasonable- must equate to what you would pay to a third party for the same duties and actually be paid to your spouse. However, it is also possible for your spouse to be a shareholder in your business and receive dividends. We would provide advice on a case by case basis once we know the facts.

As a general rule it is ok to pay your spouse a small salary but:-the amount must be reasonable- must equate to what you would pay to a third party for the same duties and actually be paid to your spouse. However, it is also possible for your spouse to be a shareholder in your business and receive dividends. We would provide advice on a case by case basis once we know the facts.

That contract would be treated as within IR35 and the required tax and NI would be charged. This would be after all allowable expenses, personal contributions and an allowance of 5% of invoices to cover notional expenses.

No. A Director can pay what level of salary they decide unless you happen to have a formal service contract with the company that dictate otherwise. We will discuss with you the level the salary should be set at for tax efficiency and personal requirements.

Yes – there is a HMRC guideline for such a calculation which we follow so that a deduction against profits can be made.

This would normally be our office.

We will commence registering you and your company (if applicable) with all of the relevant government bodies. We will also write to your previous Accountant/Adviser for professional clearance so that we have all the connecting information.

We can do this as soon as we have your contract and bank account details. HMRC can take about 4 weeks to send your registration notification.

Corporation tax is payable on business profits. and is not affected by the level of dividends. Higher rate personal tax is payable on dividends over the basic rate threshold.

There is a “nil” rate band of £2,000. All dividends above this level within the basic rate band are taxed at 7.5%. Once this total income exceeds the basic rate band the higher rate level of tax on dividends is 32.5%.

These are costs incurred that you would have been able to claim whilst you were trading eg. accountancy fees, rent, rates or stationery, etc. (s. 61 CTA 2009) However, the cost of a company formation is deemed to be a capital expense rather than a revenue expense and a tax deduction cannot be claimed regardless of when it is incurred.

As with all costs if the broadband connection is in the name of the limited company and is “wholly and exclusively” for business then a deduction can be made. If any personal use is purely incidental, and does not incur additional costs, then there will not be any tax or national insurance consequences.

If personal use is significant, and you do not reimburse your company for the personal use, then you will be taxed on the personal use as a benefit in kind. This will be advised to HMRC on form P11d and your company will have to account for Class 1a national insurance.

Where you do not have a broadband connection and you can show that this is required to do your work, then HMRC accept that this may be claimed.

The cost of entertaining clients is not tax-deductible.  With regard to staff entertaining, you are allowed to claim the cost of one or more annual functions, as long as the cost to the company does not exceed £150 pa for each person who attends.