Ltd company earnings?
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couriery
Posts: 11 Forumite
in Cutting tax
Hi
I currently work as self employed as a sole trader and I have a van for work. I wish to open a ltd company. My queries are how do I transfer my van to the company and show van costs for tax purposes.
Also how do I earn from the company? I have researched on the internet and know I can be an employee or director and get my earnings but there's also something about dividends which I did not understand at all.
Roughly I am looking at profits of £45k after expenses so how much maximum can I get out of this £45k?
Thank you.
I currently work as self employed as a sole trader and I have a van for work. I wish to open a ltd company. My queries are how do I transfer my van to the company and show van costs for tax purposes.
Also how do I earn from the company? I have researched on the internet and know I can be an employee or director and get my earnings but there's also something about dividends which I did not understand at all.
Roughly I am looking at profits of £45k after expenses so how much maximum can I get out of this £45k?
Thank you.
0
Comments
-
i will write some basic words but it is very obvious that you are in no way able to proceed without talking to your accountant. Why are you not asking them for this advice? The decision to incorporate should only be taken once the full facts of your circumstances have been number crunched.
van
is the van owned outright or on a lease? If the latter will the lease company agree to the change of ownership?
company buys van from sole trader at realistic second hand market value
company claims all costs as expenses
you personally pay benefit in kind on van
or
don't transfer it. Claim mileage rate from the company. No benefit in kind
pay
take £8,423 as salary to earn state pension credits but not pay any tax on that money. The salary is a cost for the company, so its profits will reduce compared to how you see a sole trader.
take the rest as dividends paying tax at the dividend rate and if the sole trader profits were £45k then the company profits and amount to take as a dividend will keep you within basic rate tax assuming the company is your ONLY source of taxable income. So the dividend would be taxed at 7.5%
You must learn from the word go that "you" are not a sole trader any more. The company is not you and you are not the company. Each has their own totally independent income and expenses.
NOW go and see your accountant and get a proper answer0 -
Thank you for your quick response. I will go to an accountant but I was just trying to get some basic ideas as to where I stand with this and if I'd be better off having a company than being a sole trader. I just need to find an accountant now. !!!55357;!!!56832;0
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