Limited companies and labour's autumn budget...

justpassingthrough24

I'm sorry if this is in the wrong forum, I was thinking about posting in the general tax forum but thought it would be more relevant for people here in the small biz forum.

I'm sure we're all holding out for the dreaded autumn budget changes on 31st October and how this is going to affect those who take most of their salary as dividends, but also the likely increase in corporation tax.

I've spoken to my accountant who says we shouldn't speculate until the budget is actually announced... however naturally I'm a little anxious at how this is going to affect my income. I wanted to see how others were feeling and if they had made any financial decisions in anticipation of the changes? 

How high realisatically can dividend tax and corporation tax go? 

Hoenir

Pick any number you like. Odds on you'll be wrong. 

lincroft1710

Listen to your accountant

MeteredOut

justpassingthrough24 said:

I'm sorry if this is in the wrong forum, I was thinking about posting in the general tax forum but thought it would be more relevant for people here in the small biz forum.

I'm sure we're all holding out for the dreaded autumn budget changes on 31st October and how this is going to affect those who take most of their salary as dividends, but also the likely increase in corporation tax.

I've spoken to my accountant who says we shouldn't speculate until the budget is actually announced... however naturally I'm a little anxious at how this is going to affect my income. I wanted to see how others were feeling and if they had made any financial decisions in anticipation of the changes? 

How high realisatically can dividend tax and corporation tax go? 

Why "naturally"? I'd disagree with that. 

As above, guessing (which is what anyone would be doing) does not give you any more information on which to make any informed decisions. But, if someone did come out and say "40%", what would you do? What if they were then wrong? What if someone said "20%" what would you do, and what if they were wrong?

[Deleted User]

If you're running a limited company, you have options.
Corporation tax isn't the be all and end all, it's just one part of a huge, ever changing puzzle.
One thing is for sure, I'm far happier running as limited rather than under PAYE and I'm 99.5% certain it will continue to be that way...

Hoenir

Budgets almost envitably block legal loopholes that clever minds exploit.  

justpassingthrough24

Thanks for the replies. I guess the message is there is no point playing a guessing game or trying to pre-emptively make financial decisions before the budget is announced. I need to stop overthinking and just wait till the end of the month  

Bookworm105

justpassingthrough24 said:

Thanks for the replies. I guess the message is there is no point playing a guessing game or trying to pre-emptively make financial decisions before the budget is announced. I need to stop overthinking and just wait till the end of the month  

agreed....

FFHillbilly

I think theres a good chance I could be wrapping up the Ltd company and going back to a sole trader, but I'll have to wait until the budget to decide that.

• when I switched to Ltd 10 years ago it was great, my accountant advised several loopholes and it saved thousands each year even after paying the accountants which I didn't use before
• a few years later (2019?) a few things changed and we weighed up if it was still worth it, it was but barely, and worth keeping it for the simple fact that if something goes wrong at work I'm not going to lose my house and I can just wrap up the company
• so if it swings back towards sole traders being better for my business even slightly I'll change, it would make it simpler at least I'm sick of the extra red tape anyway

All I'm going to do is take my figures for this year and work out the tax due for both scenarios when they announce the changes and see which is better

Mistral001

FFHillbilly said:

I think theres a good chance I could be wrapping up the Ltd company and going back to a sole trader, but I'll have to wait until the budget to decide that.

• when I switched to Ltd 10 years ago it was great, my accountant advised several loopholes and it saved thousands each year even after paying the accountants which I didn't use before
• a few years later (2019?) a few things changed and we weighed up if it was still worth it, it was but barely, and worth keeping it for the simple fact that if something goes wrong at work I'm not going to lose my house and I can just wrap up the company
• so if it swings back towards sole traders being better for my business even slightly I'll change, it would make it simpler at least I'm sick of the extra red tape anyway

All I'm going to do is take my figures for this year and work out the tax due for both scenarios when they announce the changes and see which is better

Aren't loopholes in the tax system the same as tax avoidance, and hence something that most accountants will shy away from, regarding giving advice.

uknick

Mistral001 said:

FFHillbilly said:

I think theres a good chance I could be wrapping up the Ltd company and going back to a sole trader, but I'll have to wait until the budget to decide that.

• when I switched to Ltd 10 years ago it was great, my accountant advised several loopholes and it saved thousands each year even after paying the accountants which I didn't use before
• a few years later (2019?) a few things changed and we weighed up if it was still worth it, it was but barely, and worth keeping it for the simple fact that if something goes wrong at work I'm not going to lose my house and I can just wrap up the company
• so if it swings back towards sole traders being better for my business even slightly I'll change, it would make it simpler at least I'm sick of the extra red tape anyway

All I'm going to do is take my figures for this year and work out the tax due for both scenarios when they announce the changes and see which is better

Aren't loopholes in the tax system the same as tax avoidance, and hence something that most accountants will shy away from, regarding giving advice.

Genuine tax loop holes are how tax consultants/accountants earn their money.  Sometimes charging out at more than £1k per hour for their advice.

What we steer away from are "schemes" such the loan ones that have now been cracked down on by HMRC.  These verged on evasion by their nature and intent.