setup a limited company to get 3 months wage slips for a mortgage

HappyMJ

notmyrealnameuk wrote: »

we will have somewhere in the region of £36,000 to put a company up and running if need be, if you have time could you explain your reply in a little more detail as it sounds good

It sounds good as it matches the answer you are looking for....

So you have £36,000? Yes? And will be putting this into the business and paying yourself a wage of £156 a week from this and any revenue the company makes. Yes... That's tax free and you pay a small amount of Class 1 NI through PAYE to keep your contributions up to date.

But....How are you going to declare dividends? They need to be declared on the profit of the company. The company needs to actually make a profit. You could defer some expenses to future months. For example if as an employee of your company you submit a mileage claim after 3 months have elapsed then it can appear for the first 3 months the company is making a profit on normal trading then after you have your mortgage you (as an employee) then submit your expenses claim to the company which then pays you the expenses you have incurred in the first 3 months as an employee tax-free and you don't distribute dividends for a while until the company has profit again. so....months 1,2 and 3 profit £3,000 and months 4,5 and 6 profit £0

notmyrealnameuk

Dave_Ham wrote: »

And then I read this - now not sure if this is wind up thread or if you are just misinterpreting (or I am?) information from sarcasm..

no dave i said this in my original post if u read up the threads

notmyrealnameuk

The_J wrote: »

Genuinely, the best advice I can give you at the moment, given how you view deaths in the family, is to murder someone who will leave you a bit of money in their will.

It's no less moral to be fair.

again another idiot response you know damn well i was talking just about the payout and not the fact she has lost her dad you fool

notmyrealnameuk

HappyMJ wrote: »

It sounds good as it matches the answer you are looking for....

So you have £36,000? Yes? And will be putting this into the business and paying yourself a wage of £156 a week from this and any revenue the company makes. Yes... That's tax free and you pay a small amount of Class 1 NI through PAYE to keep your contributions up to date.

But....How are you going to declare dividends? They need to be declared on the profit of the company. The company needs to actually make a profit. You could defer some expenses to future months. For example if as an employee of your company you submit a mileage claim after 3 months have elapsed then it can appear for the first 3 months the company is making a profit on normal trading then after you have your mortgage you (as an employee) then submit your expenses claim to the company which then pays you the expenses you have incurred in the first 3 months as an employee tax-free and you don't distribute dividends for a while until the company has profit again. so....months 1,2 and 3 profit £3,000 and months 4,5 and 6 profit £0

im going to forward this onto my accountant thank you for this

notmyrealnameuk

further to my earlier response as i havent submitted a tax return yet for the year end 2011 (1st oct 11 - 31st mar 12) i may well be able to reduce my expense claims on mileage and increase my earnings through cash jobs and i believe if i make it upto £30,000 net i could get my £120,000 which i what i need after the £155,000 mortgage that we currently have with my parents is reduced down using our payout of atleast £36,000

Dave_Ham

Lost the plot - I'm out

Feels too much like The Matrix and I now do not know what is real and what is not...

jungle_jane

I got a mortgage last year with both me and OH self employed. We are both on Ltd companies and the rule was that we needed 3 years worth of books certified by our accountant (i think it has to be a chartered accountant?).

In my case, I used the certificate from HMRC as i changed accountants a couple of years ago and he didn't have certified accounts (sorry i forget what its called but you call up HMRC and they give you a certificate of tax you paid for each year).

OH had a terrible year earnings wise in the year before and we were hoping not to have to use that set of books. His year ends 31 December and the rule was that Santander (our mortgage provider) were okay not to use previous accounts as long as our application was processed before mid June. After that they would have wanted to use his books from 2010/11. Our application was processed in April so we didn't need to use it.

It depends on how quickly your accountant can do your books i guess, however i think that 3 years worth will be taken into account. You are in a good position though if your earnings can be shown to have risen - my finance guy told me that with self employed if you year on year earnings went down it makes lenders nervous. If you can show that in fact your earnings are growing and you have 4 x salary with a large deposit (which you have) then my gut feeling is that you meet the requirement.

If I were you I would have a word with the accountant and explain the position and then go find a very good (free) financial advisor.

hope that helped.

The_J

notmyrealnameuk wrote: »

again another idiot response you know damn well i was talking just about the payout and not the fact she has lost her dad you fool

Easy son, I won't be the one looking over my shoulder in the prison shower.

If you set up a limited company it will have to have been running for at least a year, probably 2 or 3 before they will even admit you are earning income. They will not take the salary, they will not take dividends.

jimsmillions

You say that the lender wont let you keep on paying the mortgage by yourself? I'm not experienced in this and it seems odd but why not just keep paying anyway? What will they do refuse the money?

Thrugelmir

notmyrealnameuk wrote: »

(approx £20,000 net income and this is without having to declare absolutely everything to keep tax payments down)

For the sake of your family not a route to be followed.

You will be investigated thoroughly at some point in time. Once the irregularities are discovered, which they will. The HMRC will be like a dog with a bone. The penalties these days are severe. You will incur fines filing incorrect assessment forms, be levied unpaid tax, be charged penalties on under declared tax and finally be charged interest on unpaid tax.

Once people have been through the mill I can assure you they wish they had never bothered attempting to deceive.