Tax made simple for Limited Company Owners and Contractors
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If you are thinking about doing freelance work but would like to set up your own limited company, then most accountants would agree that this is the most tax efficient way to work. However, running a limited company rather than working as a sole trader can seem a bit of a daunting prospect with the additional paperwork and administrative responsibilities. Limited company taxes are indeed more complicated but people are often put off by the terms and jargons used. Don’t let this put your off from forming your own limited company as there are several clear benefits to your income. This course is designed to go through in detail what it means to set-up and run limited company, what the tax savings are and how you can reduce your tax bill through several strategies and therefore retain more of your company income/profits and pay less tax to the HMRC.
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|Section 1: Intro on setting up a Ltd Company, Responsibilities involved, Benefits & Risks|
Introduction & Learning ObjectivesPreview
Advantages of running your business as Limited Company instead of Self-EmployedPreview
Limited Company for Contract Workers (Freelancers)
Disadvantages of being a Freelancer / leaving permanent employment
What does setting up and running a Ltd Company involve?
Sole trader businesses and Limited Companies Taxed differently
Setting up a Limited Company
Limited Company Filing Responsibilities
|Section 2: How Companies are Taxed, Accounting Period/Financial Year & How to pay less Tax|
Accounting Periods and Financial Years
What is Associated Companies?
Corporation Tax on Income, and savings compared with Self-Employed
Personal Allowance, Income Tax on Personal Income and National Insurance
Tax bill on a high salary taken from the company
|Section 3: Taking money from the company – Salary and Dividends|
How Directors pay themselves – Salary vs Dividends
What is a Dividend?
Tax on Dividend Income of Directors
Income upto £100,000 with £7,956 vs £10,000 salary
What is PAYE (Pay As You Earn)?
|Section 4: Taking money more Tax efficiently|
Controlling Your Income Tax Bill
Why Take a Small Salary and how much salary to take?
Key Points about Salary & Dividends
Profit extraction tips for Companies
|Section 5: Understanding VAT|
What and Why register for VAT?
Flat Rate VAT Scheme
|Section 6: Expenses a Company can show to reduce Tax Liability|
Business expenses you can claim
|Section 7: How Couples or Family can save Tax by splitting Income|
Couples or Family can save Tax by splitting Income - Split your Dividends
How Tax-Free Income can be doubled?
Conditions on Splitting Dividends
Dividends to non-spouses must be earned
|Section 8: Owning a company and having income from other sources|
Company owners with more than one income source
|Section 9: Taking Higher Income Tax Efficiently|
Taking £100,000 or higher annual income
Short-term Tax planning
Future, long-term Tax planning
|Section 10: Doing your Self-Assessment Return|
When do I pay Income Tax?
Self-assessment Tax return (SATR)
SATR – how to avoid/reduce Payments on Account
How to delay paying Tax when income taken is higher than Basic-rate?
|Section 11: Pension Contributions|
Pension Contribution is Tax efficient
How does Salary affect Pension?
|Section 12: Keeping Your Child Benefit|
Keeping your Child Benefit
Reduce or Avoid Child Benefit Tax charge
|Section 13: Company Loans to Directors|
Directors’ Loan – Benefit In Kind
Benefit In Kind – The 30 Day Rule
Should Directors pay interest on their Directors loan?
Benefit In Kind exemption for Loans used to invest in another company
|Section 14: Capital Allowances and Capital Gains Tax|
Introduction on what is Capital Allowances
When expecting large Capital Gains, take lower income to reduce Tax
Benefit in Kind for company car, Mileage Claim
Holding property in limited company
Company pays you rent
Advantages of Using a Company to Invest in Property
Disadvantages of Using a Company to Invest in Property
|Section 15: Entrepreneur’s Relief & Moving Abroad to Avoid Tax|
Moving Abroad To Avoid Tax
Having graduated with a PhD, I moved into Project Management and have gained so far 8+ years of experience. In the last couple of years, I set up my own limited Company and worked under it as a Contractor/Freelancer. By working through my own company I have very much enjoyed the flexibility and control I have on my income and my Tax liability. I didn't like relying always on my Accountant to tell me how much money I can and can't take out of the company, what's tax deductible, how much tax, VAT, etc I have to pay every year, and not to mention the high fees the Accountants charge for all this work. A lot of the information available on the UK HMRC website and other sources use technical language which makes it very difficult for some to understand the UK Tax system. So I made it my mission to learn as much as I can about the UK Tax System, do the Tax returns and Accounts filing myself to save money on the hefty Accountancy Fees. I also decided to explain it simply to those who want to learn and have more control over their Limited Company finances.