IainGlasgow, post: 17963 a écrit : This is for all those who are trading as a one person limited company or thinking of becoming one.
I've been doing some research online and have come across various claims that as a Director of the company you are, for tax and legal purposes, classed as an employee of the company.
Okay that's nothing new but the claims I've read go further to suggest that if you are paying yourself less than the national minimum wage for the hours you work, you are (or more precisely the company is) breaking the national minimum wage act - which apparently could land you with a fine and a criminal record.
This seems a strange concept given that trading as a one person company and taking little or no salary has become something of a cliche. Infact I believe many organisations that hire freelancers often insist on dealing with an incorporated business or an umbrella company.
Other claims suggest the NMW only applies if you have a contract (written or implied) of employment with the company and that allegedly such a contract needs to exist if you want to claim working tax credit.
Anyone know what the score is on this?
Certainly the national minimum wage act was never intended to trap owner managers working alone in their business I'm sure and while the letter of the legislation may technically mandate minimum wage, I can't honestly believe it would be enforced in practice.
Hi Iain
To clarify, a director of a company is exempt from National Minimum Wage legislation, unless (s)he has an employment contract, rather than a directorship contract. This usually applies to employees who climb the ranks to become a director and the contract covers their operations duties, rather than their directorial duties.
Hope this helps but should you have any further queries please do not hesitate to contact me.
Martin Mckechnie
Client Services Director
The LowTax Group
jknightjones, post: 18020 a écrit : Hi, I'm in the process of setting up a limited company & cannot get any straight information regarding the payment of dividends. i know why their paid but when are they paid? Before payment of orporation tax or afterwards?
Any advice would be much appreciated.
J
Hello J
Dividends can be paid whenever the directors of the company choose at a minuted meeting. However, there needs to be a profit shown in the books or at the very least a “reasonable expectation” of a profit, which means that you need to keep proper accounting records.
Dividends are paid net of Corporation Tax and the company should set aside the tax to pay over to HMRC once a year.
Should you have any further queries, please do not hesitate to contact me.
Martin Mckechnie
Client Services Director
The LowTax Group
Patrick Ward, post: 17835 a écrit : The title just about says it all really but I'll give some background info.
I got laid off back in October and when my redundancy came through in December bought a PC. I hadn't planned on going full time self employed till Maybe July/August but circumstances forced my to jump sooner. I registered with HMRC at the end of January, more than a month after I bought the PC and now I'm wondering if there's any way to offset it against tax .. or something. Its used exclusively for work.
Cheers,
Pat
Hi Pat
You can claim tax relief for expenditure incurred up to 7 years prior to the business commencing as long as it would be allowed after the business had started. The expenditure is treated as being made on the day you started in business. The rules are slightly different for the purchase of an asset (such as a pc) to be used by the business, but as a rule of thumb, if the asset is unused or less than 6 months old you can claim relief on the actual cost. If the asset has been used for more than six months then you can claim for the second hand value as of the date the business commenced.
just joined the forum and this site seems a really good place for advice. I am currently out of work and am hoping to find some freelance work to tide me over in the meantime, financially and to keep my mind active and creative. I just have a few questions to ask.
I'll assume the majority have set up as a limited company, did you choose to do this through this site or do that by other means?
Finding work - this is the killer questions. Has anyone got any good refrence points, websites or tips as to how I can go about seeking some freelance oppertnities.
I am a 3D Creative designer specialising in Retail, Point of Sale and all associated works.
Thanks in advance for any advice anyone can offer.
Kind regards,
John
Hi John
If you are looking for assistance in setting up a limited company, I would be more than happy to help you out.
However, it is always best to check first that the limited company route is the best one for you. Feel free to drop me a line if you have any questions.
SteveCam, post: 17913 a écrit : I have been a freelance cameraman for many years and I am VAT registered using the flat rate scheme. For the last 3 years I have been studying whilst continuing to do a reduced amount of camerawork.
I have just accepted a full time post in my new career (academic), but will still do occasional weekend freelance work to top-up my earnings and may even go fully freelance again in the future as a consultant in my new field, so I would rather stay VAT registered. I would also have to pay some VAT back on depreciated equipment if I deregistered.
My question is: can I remain VAT registered for my small amount of freelance work over the next year or two and at the same time be employed full time in my new job, for which I will be paid a salary and not able to charge VAT? My understanding is that this should be possible as the new job is not part of my self employed (sole trader) business to which the VAT is registered, but it's difficult to find a definitive answer.
Yes it is possible. There is no need to charge VAT on your employed earnings and you can remain VAT registered on a voluntary basis for your self-employed income.
I note that you do not wish to deregister for VAT as you may have to repay the VAT claimed on items that you still hold. It is worth noting that the VAT is calculated on the value at the date of deregistration, which will probably be much lower than what you actually paid. There is also a de-minimus limit of £1,000 of VAT. Therefore, if the total second-hand value of the assets are less than £6,000 (including VAT) there is no need to repay any of the VAT.
