Permie Employee and Director of own Ltd Company...


J

JohnC

Hi folks,
I would appreciate it if someone could throw some light on the
following issue :

Having looked at the Inland Revenue website, it seems OK to be an
employee of xyz Ltd full time and also a director of your own company
at the same time.
What doesn't seem clear is how one can extract money from ones own
Limited Co (as director), i.e. is it possible to extract money via
dividends only due to already being on the payroll at another company
thus additional salary not required.

Thanks in advance
 
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T

Tim

Having looked at the Inland Revenue website, it seems OK to be an
employee of xyz Ltd full time and also a director of your own company
at the same time.
What doesn't seem clear is how one can extract money from ones own
Limited Co (as director), i.e. is it possible to extract money via
dividends only...
Either salary and/or dividends - but dividends only if also a shareholder!
 
M

Mike Lewis

JohnC said:
Hi folks,
I would appreciate it if someone could throw some light on the
following issue :

Having looked at the Inland Revenue website, it seems OK to be an
employee of xyz Ltd full time and also a director of your own company
at the same time.
What doesn't seem clear is how one can extract money from ones own
Limited Co (as director), i.e. is it possible to extract money via
dividends only due to already being on the payroll at another company
thus additional salary not required.
Yes, if you are the shareholder, but subject to IR35.
 
J

JohnC

Thanks for the reply guys.

I suppose given yesterdays S660 court decision, I might as well give
myself a 100% shareholding, doesn't seem much point in allocating
shares to my wife (Co Secretary) now, unless a nominal shareholding is
Ok for her, i.e. 25%.

Mmmmmmmmmmmmm Risky !!!
 
T

Tim

I suppose given yesterdays S660 court decision, I might
as well give myself a 100% shareholding, doesn't seem much
point in allocating shares to my wife (Co Secretary) now ...
Does that ruling apply when both husband & wife do their "fair share" of the
work, or only when it's really one person doing "all" the work?

If so, what's the test for amounts of work done by each?
 
T

Tim

I suppose given yesterdays S660 court decision, I might
as well give myself a 100% shareholding, doesn't seem
much point in allocating shares to my wife (Co Secretary) ...
If she doesn't have another job already - don't forget to pay her a salary
of £4,745+£2,020 = £6,765 (this tax year) though!
 
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J

JohnC

If she doesn't have another job already - don't forget to pay her a salary
of £4,745+£2,020 = £6,765 (this tax year) though!

The Limited Co will only be used for evening / weekend work (web
design / bespoke software etc...). It may be that nothing is paid into
the Ltd Co for a few months (no work) and then suddenly I pay in a
grand or two out of the blue, thus nobody will be on the payroll. Both
myself and my wife are full time employees already which is why I
asked the initial question about taking just dividends only. S660 sure
raises a few issues, becoming a sole trader also looks very tempting.
I might have to check with the Inland Revenue regarding taking just
dividends and also the possibility of paying my Co Secretary a
dividend.

Thanks
 
P

Peter Saxton

The Limited Co will only be used for evening / weekend work (web
design / bespoke software etc...). It may be that nothing is paid into
the Ltd Co for a few months (no work) and then suddenly I pay in a
grand or two out of the blue, thus nobody will be on the payroll. Both
myself and my wife are full time employees already which is why I
asked the initial question about taking just dividends only. S660 sure
raises a few issues, becoming a sole trader also looks very tempting.
I might have to check with the Inland Revenue regarding taking just
dividends and also the possibility of paying my Co Secretary a
dividend.

Thanks
In your position I would always prefer sole trader (subject to
insurance) unless substantial savings could be made on the tax front.
 
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J

Jonathan Bryce

Tim said:
Does that ruling apply when both husband & wife do their "fair share" of
the work, or only when it's really one person doing "all" the work?
It definitely doesn't apply where both husband and wife do their fair share
of work in the business.

It may not apply in other cases where the wife has invested money in the
business.
If so, what's the test for amounts of work done by each?
Watch this space.
 

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