New business advice please....money

[andyhinch]

Generally they do.

We were a limited company for over 40 years, not a piece of legislation that I've ever seen

 

[Chippy_boy]

Higher rate is 32.5% the additional rate is 38.1%

I meant higher in the general sense of the word. Anyway, my point was it's 38% not 40%.

 

[BerkshireBlue]

45k turnover in a food business and 32k salary? Doubt it would get signed off as a going concern tbh.

It's £45k turnover with £22k salary. Sounds fine to me

 

[aguero93:20]

It's £45k turnover with £22k salary. Sounds fine to me

Before dividends maybe. Still, rare to see a food business with 50% NP before salaries at that scale, usually the COS and overheads would be fairly high.

 

[aguero93:20]

We were a limited company for over 40 years, not a piece of legislation that I've ever seen

I used to deal with audit exempt LCs at that scale quite a bit when I was in practise and most had a solicitor, might not be legislative though.

 

[andyhinch]

no ,it's not true. I own limited company and don't have a solicitor

Didn't think it was something I'd have missed

 

[BerkshireBlue]

I meant higher in the general sense of the word. Anyway, my point was it's 38% not 40%.

the point is he'll more than likely be paying 0% on £5k and 7% on £5k to £10k and the rest at 32.5% on the dividends that is (remember his wife will double these allowances as well) unless he does remarkably well with eye watering profits and if he does that then it should be champagne all around (as well as moving HQ to Ireland to little tax at all).

 

[andyhinch]

I used to deal with audit exempt LCs at that scale quite a bit when I was in practise and most had a solicitor, might not be legislative though.

We weren't particularly big about £1.5m turnover but I'm sure my accounts would have brought it up if required, thought I was going to have to add it to my list of illegal activities :-)

 

[BerkshireBlue]

Before dividends maybe. Still, rare to see a food business with 50% NP before salaries at that scale, usually the COS and overheads would be fairly high.

I've seen food stores with 5% profit work fine so 50% would be ok. Even so, if you really wanted you could put in £5k as salary and increase overall profit which would probably be the best bet from 2020 onwards

 

[Chippy_boy]

the point is he'll more than likely be paying 0% on £5k and 7% on £5k to £10k and the rest at 32.5% on the dividends that is (remember his wife will double these allowances as well) unless he does remarkably well with eye watering profits and if he does that then it should be champagne all around (as well as moving HQ to Ireland to little tax at all).

Agreed