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Self employed Ltd paye dividend

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By *ook OP   Man
over a year ago

london

Ok so it looks like a big percentage of self employed people are still screwed. No work but don’t fit into any category as Ltd companies using paye and dividends as accountant used this as most tax efficient way... can anyone advise please as can’t get hold of accountant to check options...

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By (user no longer on site)
over a year ago

Go to the martin Lewis moneysaving web site.

Best advice and explanation I’ve seen about it all.

I do personally think that you reap what you sow, all these legal tax dodges have come back to bite and people like myself who have done everything above board are being rewarded for once.

Anyway, good luck with it all.

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By *rindiMan
over a year ago

chester

Been changed now hadnt it, you can furlough yourself as an employee of your own company but still retain director status. But will only get 80% of paye status earnings.

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By *exykatie69Couple
over a year ago

chester

I am on 0 hour contract might end up with nothing

And I pay £900 per month in stoppages

It's a joke

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By *razytimesinloveCouple
over a year ago

SW Scotland


"Go to the martin Lewis moneysaving web site.

Best advice and explanation I’ve seen about it all.

I do personally think that you reap what you sow, all these legal tax dodges have come back to bite and people like myself who have done everything above board are being rewarded for once.

Anyway, good luck with it all."

This is my view entirely. There’s loads of well off directors who have used loopholes to pay minimum tax and now suddenly want the government to step in and pay them top dollar.

Also a fair number of self employed folk who’ve just not bothered declaring full earnings that have shafted themselves too.

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By *acey_RedWoman
over a year ago

Liverpool


"Been changed now hadnt it, you can furlough yourself as an employee of your own company but still retain director status. But will only get 80% of paye status earnings. "

Yeah but the problem is a lot of directors say they pay themselves £8,000 a year then take the rest in dividends as a "shareholder". But then I guess you can't expect much back from a system you've spent years putting as little as possible into. And I say that as someone who makes 80% of my income from self employment before anyone comes for me .

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By (user no longer on site)
over a year ago


"Been changed now hadnt it, you can furlough yourself as an employee of your own company but still retain director status. But will only get 80% of paye status earnings.

Yeah but the problem is a lot of directors say they pay themselves £8,000 a year then take the rest in dividends as a "shareholder". But then I guess you can't expect much back from a system you've spent years putting as little as possible into. And I say that as someone who makes 80% of my income from self employment before anyone comes for me ."

It’s absolutely brilliant and a stroke of pure genius from the government.

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By (user no longer on site)
over a year ago


"Go to the martin Lewis moneysaving web site.

Best advice and explanation I’ve seen about it all.

I do personally think that you reap what you sow, all these legal tax dodges have come back to bite and people like myself who have done everything above board are being rewarded for once.

Anyway, good luck with it all."

Good post.

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By (user no longer on site)
over a year ago

Agree 100%

There are 10's of 1000's of company directors taking the basic tax allowance as salary (no tax) and then taking dividends (7% tax). Most will be living in luxury with a fleet of swanky cars, living off of the backs of their own workforce while paying next to nothing in tax themselves.

I've been self employed for well over 30 years, have always been screwed to the ground by HMRC and never had one penny off of the government. I was a bit shocked and happy when they finally announced what they were going to do for us. But the thing that delighted me the most was when i realized that all the freeloading tax dodging cunts that run these company's are getting nothing.

Theresa May tried to plug these loopholes about 3 years ago, and was ridiculed and told it would stifle business. The only thing it would have stifled is rich people getting richer by not paying proper rates of tax.

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By *yn drwgMan
over a year ago

Camarthen


"Been changed now hadnt it, you can furlough yourself as an employee of your own company but still retain director status. But will only get 80% of paye status earnings.

Yeah but the problem is a lot of directors say they pay themselves £8,000 a year then take the rest in dividends as a "shareholder". But then I guess you can't expect much back from a system you've spent years putting as little as possible into. And I say that as someone who makes 80% of my income from self employment before anyone comes for me ."

Just to bring you up to speed on so called tax dodge,

Any ltd company will have paid 20% corporation tax on any profit the company has made which is fair enough, then to withdraw any dividends you pay a further 7% personal tax after the 1st 3k, if you are in a position to pay yourself dividends over around 44k including your 8k salary you will fall in to higher tax band of 32%.

The op has asked a genuine question and is concerned for his income, why not give him some constructive information instead of knocking him down.

Being self employed can be very lucrative in good times but also comes at a risk as it's always been no work no pay.

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By *heBirminghamWeekendMan
over a year ago

here


"Agree 100%

There are 10's of 1000's of company directors taking the basic tax allowance as salary (no tax) and then taking dividends (7% tax). Most will be living in luxury with a fleet of swanky cars, living off of the backs of their own workforce while paying next to nothing in tax themselves.

I've been self employed for well over 30 years, have always been screwed to the ground by HMRC and never had one penny off of the government. I was a bit shocked and happy when they finally announced what they were going to do for us. But the thing that delighted me the most was when i realized that all the freeloading tax dodging cunts that run these company's are getting nothing.

Theresa May tried to plug these loopholes about 3 years ago, and was ridiculed and told it would stifle business. The only thing it would have stifled is rich people getting richer by not paying proper rates of tax.

"

Not all company directors live in luxury and have a fleet of swanky cars.

There will be some like this, but it’s not fair to generalise everyone who falls into this category of earning to be described as you do, especially as being “freeloading tax dodging cunts”

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By *rHotNottsMan
over a year ago

Dubai & Nottingham

If your an employee of a LTD company you are not self employed, use the 80% scheme.

If you’ve been living on mostly dividend to avoid paying the same level of tax that other employees do that’s that’s unfortunate as there’s no scheme for those who manipulated LTD company as a tax tool

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By *eeBee67Man
over a year ago

Masked and Distant

Too many tax loopholes. All should pay same amount of tax.

I've seen what our company pays self employed contractors and its eye watering.

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By (user no longer on site)
over a year ago


"Go to the martin Lewis moneysaving web site.

Best advice and explanation I’ve seen about it all.

I do personally think that you reap what you sow, all these legal tax dodges have come back to bite and people like myself who have done everything above board are being rewarded for once.

Anyway, good luck with it all.

This is my view entirely. There’s loads of well off directors who have used loopholes to pay minimum tax and now suddenly want the government to step in and pay them top dollar.

Also a fair number of self employed folk who’ve just not bothered declaring full earnings that have shafted themselves too. "

Yep all them dads who fiddled their books to look like they earn £7 a week will now have a taste of karma maybe.

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By (user no longer on site)
over a year ago

I'm one of the unfortunate ones who only became self employed in December of last year so will get nothing as I haven't been required to do a tax return yet.

I do however agree with what has been done and the way it has been handled as it would be so open to abuse if it was to cover people like myself. You can only imagine how many people would suddenly come forward as having been self employed with some made up b

Accounts..., just bad timing on my behalf.

I've still got costs and expenses to pay with no work coming in but that's life and I'll just have to make up for it when this is all over.

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By *oss and SuzieCouple
over a year ago

Porthmadog

Yes, I am.paid by dividends but I think I'd object to being called a freeloader when my company's on occasion paid more tax than Costa and Amazon.

I've never objected to paying tax, it's the ticket to living in a caring society. And as already said, I pay tax on my dividends which are themselves drawn from profits which have already been taxed. That is, double tax.

It's worth saying that when this is all over, it won't be the large companies that drag us out of recession, they will be looking for handouts, it will be the small fleet of foot companies.

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By (user no longer on site)
over a year ago


"Yes, I am.paid by dividends but I think I'd object to being called a freeloader when my company's on occasion paid more tax than Costa and Amazon.

I've never objected to paying tax, it's the ticket to living in a caring society. And as already said, I pay tax on my dividends which are themselves drawn from profits which have already been taxed. That is, double tax.

It's worth saying that when this is all over, it won't be the large companies that drag us out of recession, they will be looking for handouts, it will be the small fleet of foot companies."

Don’t Costa pay around 116mil in taxes?

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By *acey_RedWoman
over a year ago

Liverpool


"Been changed now hadnt it, you can furlough yourself as an employee of your own company but still retain director status. But will only get 80% of paye status earnings.

Yeah but the problem is a lot of directors say they pay themselves £8,000 a year then take the rest in dividends as a "shareholder". But then I guess you can't expect much back from a system you've spent years putting as little as possible into. And I say that as someone who makes 80% of my income from self employment before anyone comes for me .

Just to bring you up to speed on so called tax dodge,

Any ltd company will have paid 20% corporation tax on any profit the company has made which is fair enough, then to withdraw any dividends you pay a further 7% personal tax after the 1st 3k, if you are in a position to pay yourself dividends over around 44k including your 8k salary you will fall in to higher tax band of 32%.

The op has asked a genuine question and is concerned for his income, why not give him some constructive information instead of knocking him down.

Being self employed can be very lucrative in good times but also comes at a risk as it's always been no work no pay. "

Did you miss the part I said I'm self employed? I've only had the income from a 1 day a week job for Jan and Feb and I've been living off my income from the run up to Christmas. Things started to pick up again when people got paid at the end of February but now this has happened. So I'm fully aware of the highs and lows of self employment.

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By (user no longer on site)
over a year ago


"Yes, I am.paid by dividends but I think I'd object to being called a freeloader when my company's on occasion paid more tax than Costa and Amazon.

I've never objected to paying tax, it's the ticket to living in a caring society. And as already said, I pay tax on my dividends which are themselves drawn from profits which have already been taxed. That is, double tax.

It's worth saying that when this is all over, it won't be the large companies that drag us out of recession, they will be looking for handouts, it will be the small fleet of foot companies."

Yes, i have to apologize for my wording.

I know full well that not all company directors are the same, and if i was honest i would probably do the same, if in the same position .

I think my rant has more to do with why any government has let the tax situation get to the point that it has now. The tax inequality position is just fundamentally wrong and should be changed root and branch. Everyone should be taxed fairly with no wriggle out clauses anywhere in the system for individuals or companies.

And yes, your right. It will be the small companies and one man bands that actually do the groundwork to get the country back to normal, the large companies are already knocking on the doors of government for those juicy handouts.

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By *orthern StarsCouple
over a year ago

Durham

You can claim back 80% of any salary you payed yourself through the PAYE system, but you can't make any money for your company while claiming it.

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By *ook OP   Man
over a year ago

london

Ok thanks to those whom have answered in a constructive way... for the record I don’t drive a swanky car live in a big house or even take holidays. I have worked as a freelancer for over 10 years and have always paid proper tax on whatever I earned which is average money ( on time). So like hundreds of others I now have no work and my planned work ( in retail) looks like it’s dead for foreseeable future. I’m not a money grabbing Cunt thanks for that btw... just a divorced dad who wants to try and keep a roof over my head and food on table for my ex and 2 kids. I am happy to work but unable to do so. I am fuming at some of the comments on this thread...

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By *orthern StarsCouple
over a year ago

Durham


"Agree 100%

There are 10's of 1000's of company directors taking the basic tax allowance as salary (no tax) and then taking dividends (7% tax). Most will be living in luxury with a fleet of swanky cars, living off of the backs of their own workforce while paying next to nothing in tax themselves.

I've been self employed for well over 30 years, have always been screwed to the ground by HMRC and never had one penny off of the government. I was a bit shocked and happy when they finally announced what they were going to do for us. But the thing that delighted me the most was when i realized that all the freeloading tax dodging cunts that run these company's are getting nothing.

Theresa May tried to plug these loopholes about 3 years ago, and was ridiculed and told it would stifle business. The only thing it would have stifled is rich people getting richer by not paying proper rates of tax.

"

free loading tax c*nts??!! Screwed by the government??!! You need to have a rethink mate.

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By (user no longer on site)
over a year ago


"You can claim back 80% of any salary you payed yourself through the PAYE system, but you can't make any money for your company while claiming it."

How will that be policed—the making money whilst claiming the handout?

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By *orthern StarsCouple
over a year ago

Durham


"You can claim back 80% of any salary you payed yourself through the PAYE system, but you can't make any money for your company while claiming it.

How will that be policed—the making money whilst claiming the handout? "

I'm assuming the only way will be if they look at the trading accounts of the company. If profits are the sane or higher maybe they will investigate further. Who knows. The government are doing their best.

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By *orthern StarsCouple
over a year ago

Durham


"You can claim back 80% of any salary you payed yourself through the PAYE system, but you can't make any money for your company while claiming it.

How will that be policed—the making money whilst claiming the handout?

I'm assuming the only way will be if they look at the trading accounts of the company. If profits are the sane or higher maybe they will investigate further. Who knows. The government are doing their best."

*same

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By (user no longer on site)
over a year ago


"You can claim back 80% of any salary you payed yourself through the PAYE system, but you can't make any money for your company while claiming it.

How will that be policed—the making money whilst claiming the handout?

I'm assuming the only way will be if they look at the trading accounts of the company. If profits are the sane or higher maybe they will investigate further. Who knows. The government are doing their best."

Oh I see - thanks

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By (user no longer on site)
over a year ago

[Removed by poster at 29/03/20 12:58:47]

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By (user no longer on site)
over a year ago

How much National Insurance do you pay on corporation tax or dividends?

As devil's advocate isn't the N.I. the 'pot' that is used to pay benefits, or in this case salary subsidies?

I'm not arguing against dividends as a way to top-up your earni gs, it's legal but then if you use it to pay less overall tax (including N.I.) then you can't realistically expect to get the same benefit as those who have paid on a full PAYE or self assessment income?

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By (user no longer on site)
over a year ago

You cant blame people for using a perfectly legal tax loophole to pay less tax, I'm one of them.

I for one wont be claiming the 80%. I've always had a pot put away should something happen that would prevent me working.

I understand not everyone can this.

In response to the free loading tax dodging cunts comment. I pay everything I should in accordance with the rules,corporation tax, VAT etc. I also pay NI voluntarily.

No dodging, no free loading.

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By (user no longer on site)
over a year ago

I've used dividends to with a past company I formed and was a director of.

I knew exactly what I was doing and used the system to my advantage. That's why I wouldn't complain if I only got 80% of the actual earnings (not dividends) I'd taken at this time. Unfortunately you can't have it all ways.

Yes I do feel sorry for those that are now struggling and especially for those whose companies and jobs won't make it through this, but the system has to be as fair as it can be to the vast majority.

The tax system and benefits system have been broken for a very long time, maybe, just maybe, it will be seriously looked at when things settle back to 'normal'.

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By *acey_RedWoman
over a year ago

Liverpool


"How much National Insurance do you pay on corporation tax or dividends?

As devil's advocate isn't the N.I. the 'pot' that is used to pay benefits, or in this case salary subsidies?

I'm not arguing against dividends as a way to top-up your earni gs, it's legal but then if you use it to pay less overall tax (including N.I.) then you can't realistically expect to get the same benefit as those who have paid on a full PAYE or self assessment income? "

None. Though you can voluntarily pay more than that on your salaried income if you choose to so it doesn't affect your pension.

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By *ophieslutTV/TS
over a year ago

Central

There's a lot of discussion on this in the Virus section.

At times like this we get to fully understand the importance of paying taxes, as this is how essential state responsibilities and services such as healthcare are funded. Pay less tax and services get starved, so that they don't have the resilience to cope during emergencies. There may come a point where those who limit their contribution to the decent society that we have and take for granted are viewed as more like pariahs.

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By *ooskiMan
over a year ago

south coast


"Ok so it looks like a big percentage of self employed people are still screwed. No work but don’t fit into any category as Ltd companies using paye and dividends as accountant used this as most tax efficient way... can anyone advise please as can’t get hold of accountant to check options... "

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By (user no longer on site)
over a year ago


"There's a lot of discussion on this in the Virus section.

At times like this we get to fully understand the importance of paying taxes, as this is how essential state responsibilities and services such as healthcare are funded. Pay less tax and services get starved, so that they don't have the resilience to cope during emergencies. There may come a point where those who limit their contribution to the decent society that we have and take for granted are viewed as more like pariahs. "
very true. Sadly many people circumnavigating obligations through loopholes have often been portrayed as beating an oppressive system!

Its difficult times for everyone, and irrespective of political persuasions, theres an awful lot of work ongoing to help and support people, and whilst it wont operate 100% efficiently to begin with, I believe it's getting there slowly.

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By *yn drwgMan
over a year ago

Camarthen

Not sure how paying 27% is a tax dodge, yes things were different in the past maybe you need to look at the big corporations who register they're companies abroad and see how much tax they pay, the majority simply try to make a living legally. There will be some years after paying all the bills companies will not have made any money but will have paid all the staff, suppliers, rents and running costs how is that not contributing. The bottom line is not all self employed companies can afford to pay the owner a regular wage.

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By *ondonexplorerMan
over a year ago

Ascot

I was made redundant about a year ago, no payout as I was employed for less than 2 years.

Then I started my own company and took accountants advice to pay myself minimum in wages and the rest as dividends. His reasoning that it was best option for a startup until the business is profitable.

As a fledgling business the dividends have been pretty small, so it's not as though I've earned very much and haven't screwed the state. I've never claimed for any sort of benefits and hope to never have to, but right now I'm pretty screwed.

I didn't choose to be made redundant, I haven't broken any laws, I've aways paid my taxes and yet the government is happy for me to slip through the cracks.

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By *hrobberMan
over a year ago

North West

Basically you reap what you sow.

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By *ondonexplorerMan
over a year ago

Ascot


"Basically you reap what you sow. "

I 'sowed' tax payments all my working life. I deserve reaping as much as the next person.

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By *oss and SuzieCouple
over a year ago

Porthmadog

The target is the wrong one. Maybe making sure the big boys (Amazon etc.) pay tax in the UK rather than using dubious accounting practices to transfer profits to low tax countries would help generate the funds that will needed to rebuild our economy.

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By *ondonexplorerMan
over a year ago

Ascot


"The target is the wrong one. Maybe making sure the big boys (Amazon etc.) pay tax in the UK rather than using dubious accounting practices to transfer profits to low tax countries would help generate the funds that will needed to rebuild our economy."

Well said.

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By *untimes6969Man
over a year ago

Newcastle upon Tyne


"The target is the wrong one. Maybe making sure the big boys (Amazon etc.) pay tax in the UK rather than using dubious accounting practices to transfer profits to low tax countries would help generate the funds that will needed to rebuild our economy."

This has to be one of the biggest gripes for everyone - make the ‘free trade’ a common and level playing field!!

Online only businesses are crippling the high street - is that what we all really want? Maybe a special tax, say 10% should be used for online only sales plus the proper tax paid on all goods sold in our country!

With regard to S/E income, you only claim what you’ve earned - seems simple enough! Pay no NI contributions, benefits should be proportionate but appreciate it needs to be a quick fix / catch all under the current circumstances! A hard one for anyone to call plus we’ve all got to pay it back at some point, via tax in the years to come!

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