Best tax solution for micro business
Discussion
Used to have an LTD for small business (2 owners) With hindsight it probably could’ve been a partnership. The business and bank account etc all discontinued years ago.
An opportunity has come about for a project paying around 10k. But maybe no further business after that.
What would be the easiest way to be paid that and avoid / minimise paying tax on that. E.g with the ltd we could offset some costs and take a dividend.
Is there anything available through a more simple business set up eg a Partnership and just pay into a personal bank account? Does that come with the same tax benefits??
I’m already paying tax through full time employment so used up the usual tax free allowance.
Thanks
An opportunity has come about for a project paying around 10k. But maybe no further business after that.
What would be the easiest way to be paid that and avoid / minimise paying tax on that. E.g with the ltd we could offset some costs and take a dividend.
Is there anything available through a more simple business set up eg a Partnership and just pay into a personal bank account? Does that come with the same tax benefits??
I’m already paying tax through full time employment so used up the usual tax free allowance.
Thanks
The only way I can think of is to establish yourself as a Sole Trader. Open a separate bank account into which your fees are paid and from which any related costs are paid. Because it's not a Ltd company, you won't be able to take a dividend.
I'm thinking that the most tax efficient way to pay yourself the money is to pay it all into a pension. Not much use if you need the money now, though.
If you pay yourself that profit there's no corporation tax to pay but you will be liable for income tax on that amount. Are you married? If so, split the payment between the two of you which may minimise your liabilities.
All that said, an accountant would be your best port of call who'll be able to assess the options taking the whole picture of your finances into account.
I'm thinking that the most tax efficient way to pay yourself the money is to pay it all into a pension. Not much use if you need the money now, though.
If you pay yourself that profit there's no corporation tax to pay but you will be liable for income tax on that amount. Are you married? If so, split the payment between the two of you which may minimise your liabilities.
All that said, an accountant would be your best port of call who'll be able to assess the options taking the whole picture of your finances into account.
torqueofthedevil said:
An opportunity has come about for a project paying around 10k. But maybe no further business after that.
What would be the easiest way to be paid that and avoid / minimise paying tax on that.
Unless you want to put it in a pension the only way to avoid tax would be cash in hand or barter.What would be the easiest way to be paid that and avoid / minimise paying tax on that.
By the time you have set it up and done the accounts etc. setting up a Ltd. won’t be worth it for a one off £10k.
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