Self employment advice sought :)

[SpokeyDokey]

Dividends for small businesses have become less attractive with the Dividend Allowance dropping from £5k to £2k in this tax year.

I think there was an online calculator to plug in data to determine whether Sole Trader or Ltd company was the way to go for the smaller business - can't find it though.

 

[SpokeyDokey]

30 days is normal for me. There was recently a change in the law that entitles you to claim compensation if payment is later than 60 days from invoice. I'm not sure of the exact details but it should all be on the HMRC website.

Small (very) business owner here. We used to do 60 days and then dropped it to 30 although 4-5 months ago we switched to 'by return'.

None of our customers have complained. The rationale was purely that we were trying to maximise the interest in one of our accounts. Not much of a gain tbh but still - every little helps!

NB: not criticising your 30 day terms.

 

[vickster]

I know you have, and I also know that you have taken professional advice which is right and proper. My own experience is that a Ltd company is not the most efficient way to deal with tax unless you really need the protection that it offers. 8k corporation tax seems a bit excessive to me for an individual unless you're profit margins are huge.

Everything I earn is profit I guess. I’m essentially a consultant. I don’t sell anything other than my soul

I get paid within a month of submitting an invoice currently. They like me to invoice every 2 weeks, my last was 5 as I was so busy.

I’ve had 45 day terms from submitting a month
End invoice previously

 

[Slick]

Everything I earn is profit I guess. I’m essentially a consultant. I don’t sell anything other than my soul

I get paid within a month of submitting an invoice currently. They like me to invoice every 2 weeks, my last was 5 as I was so busy.

I’ve had 45 day terms from submitting a month
End invoice previously

Yeah fair enough. The umbrella thing is great but I'm sure it will get an overhaul after the Pimlico plumbers court case. I know for sure on 100K earnings on an umbrella scheme they are paying on average 3K tax in one particular sector. Hard to beat but it is definitely being looked at.

 

[midlife]

Yeah fair enough. The umbrella thing is great but I'm sure it will get an overhaul after the Pimlico plumbers court case. I know for sure on 100K earnings on an umbrella scheme they are paying on average 3K tax in one particular sector. Hard to beat but it is definitely being looked at.

Did I miss read something.... Someone earns £100,000 and pays £3,000 tax?

 

[Slick]

Did I miss read something.... Someone earns £100,000 and pays £3,000 tax?

Yes. Umbrella, quite common but I also know HMRC are looking at a number of cases.

 

[vickster]

Yeah fair enough. The umbrella thing is great but I'm sure it will get an overhaul after the Pimlico plumbers court case. I know for sure on 100K earnings on an umbrella scheme they are paying on average 3K tax in one particular sector. Hard to beat but it is definitely being looked at.

Fiddling the taxman isn’t my thing and I expect my FTSE 100 employers would be less than impressed too

 

[Slick]

Fiddling the taxman isn’t my thing and I expect my FTSE 100 employers would be less than impressed too

It's not a fiddle until Hector says it's a fiddle. It's been a thing now for a number of years.

 

[Slick]

I would add that a number of these firms use it.