Self-Employed with LTd Company and Tax

00ec25

matt78uk wrote: »

it was the table down the page I had to look at! :T
I guess the same threshold would be the same for me.

yes the NI table 2.1 covering Class 1 rates LEL £113/week (17/18 rate) PT £157

matt78uk wrote: »

To be honest from all you guys have told me I think my partner could just as well pay Class3 Voluntary Contributions and I will setup myself as the only employee, as I was saying she would only work a few hours a week and I couldn't justify paying her a salary of £50/hr (I know some people do but I couldn't sleep at night).
I guess the same threshold would be the same for me.

it is of course your choice, and at the end of the day it is some pretty small numbers we're playing with, but Class 3 is (relatively) expensive given it is a flat rate £14.25 per week (or £13.25 depending on her age) in comparison to being on a (lowish) wage per week
https://www.gov.uk/voluntary-national-insurance-contributions/rates

to end up paying £14.25 in Class 1 NI, she would have to be earning £275.75 gross pay per week (comprising £157 tax free below PT + 118.75 taxable at 12% = £14.25 NI payable). Alternatively if she was earning between £114 - £156 per week she would pay nothing yet still get the same credit as she is physically buying with her £14.25 of class 3 payments.

I do however take your point about the effective rate per hour she would be"earning" if you paid her £114/week. That would however mean you need to buy the Employers Liability Insurance previously mentioned so overall the net result may not be much of a saving by the time you have factored in all the variables (including lower corporation tax because of the impact of the extra costs)

nice academic exercise to calculate if you want, but probably not cost effective to pay your accountant to work it out for you

matt78uk

00ec25 wrote: »

yes the NI table 2.1 covering Class 1 rates LEL £113/week (17/18 rate) PT £157

it is of course your choice, and at the end of the day it is some pretty small numbers we're playing with, but Class 3 is (relatively) expensive given it is a flat rate £14.25 per week (or £13.25 depending on her age) in comparison to being on a (lowish) wage per week
https://www.gov.uk/voluntary-national-insurance-contributions/rates

to end up paying £14.25 in Class 1 NI, she would have to be earning £275.75 gross pay per week (comprising £157 tax free below PT + 118.75 taxable at 12% = £14.25 NI payable). Alternatively if she was earning between £114 - £156 per week she would pay nothing yet still get the same credit as she is physically buying with her £14.25 of class 3 payments.

I do however take your point about the effective rate per hour she would be"earning" if you paid her £114/week. That would however mean you need to buy the Employers Liability Insurance previously mentioned so overall the net result may not be much of a saving by the time you have factored in all the variables (including lower corporation tax because of the impact of the extra costs)

nice academic exercise if you can, but probably not cost effective to pay your accountant to work it out for you

There are way too many things to consider, it's like playing Dungeon and Dragons without the fun part... :doh:

Matt

00ec25

matt78uk wrote: »

There are way too many things to consider, it's like playing Dungeon and Dragons without the fun part... :doh:

Matt

now your talking - I find Neutral Cleric works well against HMRC Dragons

Potbellypig

Remember that the accountant works for you. He is providing a service which you pay for. You can cut ties with him at any point.

I would suggest that you leave all of this up to your new accountant and don't worry about a thing. Tell him/her what you want and they will come back with what you can do.

I have a great accountant who does all of the above and I worry about nothing. (I'm in a similar position to yourself - a contractor who owns a Ltd company, I'm the director and I pay my partner a wage.) If you want his number, just pm me.

matt78uk

Hi Everyone,

I thought I would give you a quick update about my situation.
I have booked an Appointment with an ACCA registered Accountant next week. It s quite a big firm and they are based in my area so I can discuss the matter face to face with them.

I wanted to thank everybody for the helpful suggestions as I think I will be able to meet the Accountant with a better understanding of what I need and what to ask.

Kind Regards,

Matt