VAT Threshold

[Part Timer]

VAT Threshold going up to £90k, might help a few of the busier guys delay for a year or two

 

[ched999uk]

Don't forget National Insurance going down to 6% (from 10% last year)!

 

[Pjj]

They will give with one hand and take with the other ?

 

[Part Timer]

Don't forget National Insurance going down to 6% (from 10% last year)!

Being a Ltd Company many won't pay NI

 

[Pjj]

Being a Ltd Company many won't pay NI

I don’t have a clue about this I leave it all to my accountant I dont want to or have any interest in trying to understand it but thought everyone pays ni I certainly do .

 

[Part Timer]

I don’t have a clue about this I leave it all to my accountant I dont want to or have any interest in trying to understand it but thought everyone pays ni I certainly do .

Just take a monthly wage below NI threshold, so you or your company doesn't pay it. Bigger dividend at the end of the year to compensate.
Only any good if you can afford to live a year on a low wage.

 

[JohnDoeWindows]

Being a Ltd Company many won't pay NI

Just take a monthly wage below NI threshold, so you or your company doesn't pay it. Bigger dividend at the end of the year to compensate.
Only any good if you can afford to live a year on a low wage.

There are some instances where it makes more sense to go above the NI threshold, I was advised by my accountant to take a bonus this year which meant I've had some NI to pay but I've been assured it'll save me money somewhere.... No idea where but that's what we pay an account for hey

 

[Part Timer]

There are some instances where it makes more sense to go above the NI threshold, I was advised by my accountant to take a bonus this year which meant I've had some NI to pay but I've been assured it'll save me money somewhere.... No idea where but that's what we pay an account for hey

As he's an Accountant he probably knows better but I've always been advised low wage, big dividend

 

[ched999uk]

Just take a monthly wage below NI threshold, so you or your company doesn't pay it. Bigger dividend at the end of the year to compensate.
Only any good if you can afford to live a year on a low wage.

People who need to get a mortgage or finance will need to prove a decent paye income. The people who used dividends also suffered when the gov where dishing money out due to covid as they didn't include dividend payments as 'income'.

If you don't have a mortgage or need a loan then using dividends can be a good way to save on tax.
The other thing to watch out for is your NI makes up your pension contributions, so not paying it can impact your pension - if you ever get old enough to claim it!

 

[Part Timer]

There are specialist brokers that can help get you you a mortgage. I've never paid NI for 25 years but my state pension is full without ever paying stamp

 

[ched999uk]

There are specialist brokers that can help get you you a mortgage. I've never paid NI for 25 years but my state pension is full without ever paying stamp

That's good going re NI.
Are there still brokers that can get self cert type mortgages? I thought that had all been banned when they brought in the affordability and earnings checks.

 

[Deleted member 5762]

That's good going re NI.
Are there still brokers that can get self cert type mortgages? I thought that had all been banned when they brought in the affordability and earnings checks.

@ched999uk I just got a mortgage a couple of months ago and had to use a broker. No such thing as self certified mortgages any more. Full affordability checks and proof of business income. I actually applied myself and got flat denied by two very big mortgage providers, so we went to a see a lady locally who’s a mortgage broker and she sorted it all out. I was very well prepared but it was still a bit of a ball ache going and back and forth for a bit while the mortgage provider asking lots of questions.

 

[Chris34]

That's good going re NI.

It sounds good but when you look at it for a sole operator it's not tax efficient.

Taking aside the low monthly salary to use up the individuals tax free personal allowance as this is tax free whether you're sole trader or a Ltd company (classed as a cost and when paid out it's the individual who uses the tax free allowance). A Ltd company making a profit of £50k has to pay 25% corporation tax. You then have to pay 8.75% tax up to £36,700 and then 33.75% tax on the remaining £700. So it's a total of £3211.25 + £236.25 = £3447.5 for the dividend payment and £12,500 for corporation tax, total = £15,947.5

Compare that to just running it as a sole trader and for your £50k of money (after the tax free allowance) you would pay something like 20% income tax and 6% National insurance. So that would work out at £7,539.8 for income tax up to £37,699 and £4,920.4 for 40% income tax on the remaining £12,301 and something like £3,000 for NI (trying to work out the national insurance brackets is a minefield I don't want to navigate this time of night, lol), so that's a total of £15,460.2 in tax and NI on that £50k (the tax free personal allowance is on top of this).

I think that's right anyway, off to bed. My heads spinning now, lol. ?

 

[Iron Giant]

I've never paid NI for 25 years but my state pension is full without ever paying stamp

This is strange as far as I understood things you need a full 35 years of NI contributions to qualify for the full state pension they are every now and then making something of this in the papers.

 

[dazmond]

There are specialist brokers that can help get you you a mortgage. I've never paid NI for 25 years but my state pension is full without ever paying stamp

How can you have a full state pension if you ve never paid national insurance?

How indeed do you NOT pay national insurance when it's part of your tax bill????

 

[dazmond]

This is strange as far as I understood things you need a full 35 years of NI contributions to qualify for the full state pension they are every now and then making something of this in the papers.

I'm sure it's 30 years but I maybe wrong.

How do you avoid paying national insurance because its part of everyones tax bill?

 

[Part Timer]

This is strange as far as I understood things you need a full 35 years of NI contributions to qualify for the full state pension they are every now and then making something of this in the papers.

I have a few years where they are checking but I have full pension on the HMRC pension check page.
I have been working for 43 years though and I believe, not certain, that if your wage is deemed as low they allow you to be classed as eligible.

 

[Part Timer]

I'm sure it's 30 years but I maybe wrong.

How do you avoid paying national insurance because its part of everyones tax bill?

If you're self employed then yes you pay Class 4 NI but that doesn’t contribute towards your pension

 

[Part Timer]

That's good going re NI.
Are there still brokers that can get self cert type mortgages? I thought that had all been banned when they brought in the affordability and earnings checks.

As long as you have a history of regular dividends, as they are taxed as income, then you should be able to get a mortgage.

 

[Iron Giant]

I have a few years where they are checking but I have full pension on the HMRC pension check page.
I have been working for 43 years though and I believe, not certain, that if your wage is deemed as low they allow you to be classed as eligible.

I wasn't entirely sure to be honest I was concerned about my wife going part time although she probably has done just over 30 years of full-time hours with no breaks for raising kids.

 

[Dave B]

There are specialist brokers that can help get you you a mortgage. I've never paid NI for 25 years but my state pension is full without ever paying stamp

Showing your age mate
Stamps haven’t been around for tax since I was young lol