View Full Version : Anyone an Accountant??
Is anyone on here an accountant, in particular with experience of the construction industry scheme?
What do you want to know.
I have done a couple of subcontractors latley for returns but not my speciality.
main thing was i know that you can claim money back against tax if you lease a car, but if you lease a car can you still claim the mileage at 40p a mile for first 1`0k and then 25p there after?
TBH had a long chat with a mate of mine this afternoon and got pretty much everything sorted out in my head now, we just weren't sure on that one
Well I would say no you cannot.
If you lease the car and claim the VAT on the lease I would tend to say that was a company expense and not private.
The claiming of 40p a mile is on a private vehicle and constitues an expense claim.
Otherwise you are claiming mileage expenses on a company paid item anyway.
The leased car would not be in the companys fixed assets though.
What company do you work for?
I'm planning to set up my own limited company and become a freelance engineer, what i had heard is that if you have a commercial vehicle you claim the receipts but if its a car then you claim the mileage, but i'm not sure if that applies if you lease a car through the company, or can you claim your diesel receipts back through the company as an expense against the tax
i would claim the value of the lease back against the tax so if it cost me £500 a month to lease i could offset that against £500 of tax, i'd claim the vat back anyways off the fuel and car
Yeh thats right.
If its a privatley owned vehicle you claim mileage only - although tax free.
If it is in the business you claim ALL business expenditure.
Therefore if you claim the lease then it is business so you cant claim mileage, but you can petrol and all servicing and repair expenses, insurance etc etc. If you got a lease through the business and it was deemed to be a finance lease then this would be capitalised under accounting standards which causes a few more consequences.
These include further expenses to incur like, company car tax, private fuel and possibly a scale charge each month if you dont keep STRICT mileage records.
Although if you did vat on an invoice basis since the lease would be treated effectively as a loan in your balance sheet you could claim all the vat upfront and get some cash in your pocket. Although this may be outweighed by the expenses mentioned above. If you did VAT on a cash basis though you would only claim VAT as you pay, this includes on expenses and sales invoicing.
Without actually going through it you cannot tell which is the best thing to do.
On a side note who has given you the advice to go Ltd? I wouldnt recomend setting up a Ltd Co just yet as you dont gain any advantages. Ltd Co's are only an advantage if you earn super profits and can distrubite them in the form of divis @ 19% plus corp tax becoming less than High Earning Level tax i.e. 41%.
You also have added admin, initially start up solicitor fee's, annual returns and accounts deadline dates.
You also have responsabilities under the companies Act 1985. Have you talked about this with a professional as I think you need to.
I will defo speak to an accountant, i just want to get it all straight in my head so i can go and discuss it with someone with me knowing what i'm talking about.
The main thing with a limited company is the limited liability i could potentially **** up and it would cost ALOT of money to put right, once you start breaking out concrete walls it becomes very expensive very quickly
Yeh. Thats a fair point.
Just didnt want you thinking like everyone else that its a really good tax break as its not.
I'm doing my Chartered exams currently but if you want some more basic help just pm me.
I can save shit loads on tax, car lease and maybe fuel will offset the flat 20% corporation tax, and the pay myself minimum wage ie £100 a week, and pay the rest in dividends at 10% tax
Lunner I can recommend Paystream, I'm a freelance Cad Draughtsman and they sort all my taxes, expenses etc. have a look on their website or give them a ring and see what you think, they would be able to explain everything to you.
www.paystream.co.uk
Also have a look on here, lots of information about the ins and outs of contracting through your own limited company, company cars, expenses etc.
www.contractorcalculator.co.uk
its less than that really as you only pay corporation tax and nothing else up 38 thousand pounds i believe so a little less. plus your national insurance is paid too.
plus you can pay that too two or more directors so you can clear 80,000 at 20%
stevie_b
18-02-2008, 10:29
its less than that really as you only pay corporation tax and nothing else up 38 thousand pounds i believe
Yes, and any salary you pay yourself comes out of the pre-taxed profits of the company, so that's 5 grand or so up to your personal allowance with no corporation tax either! The next 33 grand odd, as you say, comes out with no personal tax liability, but you will have paid corporation tax on it.
plus your national insurance is paid too.
Don't think so. If you are paying it out as a divi it doesn't have NI implications, so you'll either need to chip in to buy the NI for those years, or if you have kids you can get NI credits against that.
I was under the assumption you paid 20% corporation tax on anything up to 300k, and you paid yourself a sallery of £5220 (your tax free allowance) and paid the rest in dividends at 10% tax, abvously anything you can put through the company ie car etc can go against your corporation tax and also you won't pay dividend tax on
Surely all your work will be insured in anycase...
Depends if i "fly by the seat of my pants" or choose insurance, need to get a quote really
Surely you would need public liability anyway??
Makes sense to add service indemnity also...
If you go Ltd you are bound by Company Law as a Director to get Liability Insurance so you cannot choose not too.
stevie_b
19-02-2008, 21:42
I was under the assumption you paid 20% corporation tax on anything up to 300k, and you paid yourself a sallery of £5220 (your tax free allowance) and paid the rest in dividends at 10% tax
Not quite. The amount of the dividends (grossed up by 10%) you pay yourself within the basic rate tax band will effectively be tax free - no 10% tax to pay. Once you go over the basic rate tax band (40035 for '08-'09 tax year) then you'll pay another 25% on the dividend income you receive. So depending how much you plan to take out in divis you'll either be better off or worse off than you thought :lol:
If you go Ltd you are bound by Company Law as a Director to get Liability Insurance so you cannot choose not too.
Which part of Company Law says that?
I cannot dig up where I got that from.
Maybe I am getting confused with Employers Liability.
If you go Ltd you are bound by Company Law as a Director to get Liability Insurance so you cannot choose not too.
Incorrect i know people who don't have insurance, what you mean is some companies insist upon it when employing your services
I was under the assumption you paid 20% corporation tax on anything up to 300k, and you paid yourself a sallery of £5220 (your tax free allowance) and paid the rest in dividends at 10% tax
Not quite. The amount of the dividends (grossed up by 10%) you pay yourself within the basic rate tax band will effectively be tax free - no 10% tax to pay. Once you go over the basic rate tax band (40035 for '08-'09 tax year) then you'll pay another 25% on the dividend income you receive. So depending how much you plan to take out in divis you'll either be better off or worse off than you thought :lol:
If you go Ltd you are bound by Company Law as a Director to get Liability Insurance so you cannot choose not too.
Which part of Company Law says that?
Is this offset against your corporation tax, so say you rack up £10k corporation tax over the year, and pay yourself £40k in dividends, do you still have to pay £10k corporation tax or £6k?
stevie_b
22-02-2008, 19:59
Dividends are paid post corporation tax. Salary is paid pre-corporation tax.
So for a simple example... Let's say before you take any money out the company has made £30k profit. You pay yourself a salary of 5k. The profit is now down to 25k. So you pay corporation tax at 19% (changes soon though) of 25k = £4750. That leaves £20,250 left in profit after tax, which you could choose to pay yourself as a dividend. From a personal perspective you'd then have £25,250 in your own pocket with no personal tax to pay on it. Same logic follows up until you go over the basic rate tax band, then you'd start paying tax on that part of the dividend paid too.
Can i pay dividends out each month? Surely i don't have to be trading for a year on minimum wage before i can pay dividends out?
I want to lease a car and claim mileage against my corporation tax, will the amount of dividends i pay myself have any bearing on how much tax i can claim against?
You must be careful not to take out illegal dividends if you do that. If you also take out more than availible and have to class it as wages you may end up with a hefy PAYE & NI bill.
Income each month should be around the same, and i need to do that, i can't live off £100 a week lol
Gonna route as much of my expenses as i can through the company anyways
Powered by vBulletin® Version 4.2.5 Copyright © 2024 vBulletin Solutions Inc. All rights reserved.