Restructuring Business, 2 year fixed mortgage

Thrugelmir

Why not focus on extracting the money as tax efficiently from the business and using the "spare" cash to reduce your current mortgage debt. (I assume that you already pay into a pension scheme to reduce your taxable company profits). As no one can predict the future and what the rules/lending criteria might be.

looknohands

Thanks I guess the point I mentioned earlier is I want to grow the company. The company isn't a front to efficently pay less tax personally. So taking more money out of it to pay my mortgage or build a bigger pension pot isn't my aim here, my aim is to have something separate from my personal tax that I can grow. The hope being the business would ultimately make me more money than my house...

looknohands

amnblog wrote: »

The contact at Virgin meant they would work on the profit from the business (assuming you own it all) plus the paye salary you receive (which will of course will be paid before the profit figure is calculated).

Thanks amnblog, this is what I thought was strange, so in my current situation if I paid myself £35k and kept the £25k profit in the business I would still have a mortgage assessed income of £60k, even though only £35k of that money is technically mine personally.

Do you know if the multipliers are different on business profit portion over salary?
Do you know if the reverse is true, so if the business makes a loss but I still pay £35k salary would they look upon this as my income being £0, -£35k or £35k?
In the case of the last one if I go with a lender who doesn't take retained profit as income they would also ignore any losses in the company?

Verix

Any lender is going to be unhappy if they look at your accounts and find you are paying yourself a salary from a company that is making a loss.

looknohands

Figured it might be more to do with net worth if you run a loss? operating at a loss doesn't mean a business is failing...OH is company secretary and shareholder (10%) at a business that has a net worth of 400k but ran a small loss last year as they spent a lot on re-branding, e-commerce, website and investing in a lot of new stock, which will mean this year is more profitable, the business has been there 50 years and would last another 50...
obviously still paid salaries to director though!