Basic Tax advice
Discussion
Hi All - Basic tax question please.
I have a small car storage business which i have setup as a limited company. I rent the space from a landlord and sub let spaces to people to store and work on their cars. I make very little profit.
I am looking for a company to manage the books and prepare the companies house documentation. Taxez in Edinburgh came highly recommended, however they will not offer me any advice.
I want to know if the little profit i make can be used to pay me a wage or should i perhaps use this to buy tools to be used at the storage unit by the clients which i can then depreciate to zero value over say 2 - 3 years.?
What works in my benefit?
Any help appreciated.
I have a small car storage business which i have setup as a limited company. I rent the space from a landlord and sub let spaces to people to store and work on their cars. I make very little profit.
I am looking for a company to manage the books and prepare the companies house documentation. Taxez in Edinburgh came highly recommended, however they will not offer me any advice.
I want to know if the little profit i make can be used to pay me a wage or should i perhaps use this to buy tools to be used at the storage unit by the clients which i can then depreciate to zero value over say 2 - 3 years.?
What works in my benefit?
Any help appreciated.
Ray Singh said:
Hi All - Basic tax question please.
I have a small car storage business which i have setup as a limited company. I rent the space from a landlord and sub let spaces to people to store and work on their cars. I make very little profit.
I am looking for a company to manage the books and prepare the companies house documentation. Taxez in Edinburgh came highly recommended, however they will not offer me any advice.
I want to know if the little profit i make can be used to pay me a wage or should i perhaps use this to buy tools to be used at the storage unit by the clients which i can then depreciate to zero value over say 2 - 3 years.?
What works in my benefit?
Any help appreciated.
Will your clients pay extra if you provide them with some tools? If not then I'm curious as to why you would incur extra costs without any extra benefit. or are you thinking of using the tools yourself but putting the expense through the LtdCo to reduce any CT liability?I have a small car storage business which i have setup as a limited company. I rent the space from a landlord and sub let spaces to people to store and work on their cars. I make very little profit.
I am looking for a company to manage the books and prepare the companies house documentation. Taxez in Edinburgh came highly recommended, however they will not offer me any advice.
I want to know if the little profit i make can be used to pay me a wage or should i perhaps use this to buy tools to be used at the storage unit by the clients which i can then depreciate to zero value over say 2 - 3 years.?
What works in my benefit?
Any help appreciated.
In terms of "paying yourself a small wage" it depends on several things as to which is the most tax efficient option
Ray Singh said:
Hi All - Basic tax question please.
I have a small car storage business which i have setup as a limited company. I rent the space from a landlord and sub let spaces to people to store and work on their cars. I make very little profit.
I am looking for a company to manage the books and prepare the companies house documentation. Taxez in Edinburgh came highly recommended, however they will not offer me any advice.
I want to know if the little profit i make can be used to pay me a wage or should i perhaps use this to buy tools to be used at the storage unit by the clients which i can then depreciate to zero value over say 2 - 3 years.?
What works in my benefit?
Any help appreciated.
Trying to do things on the cheap always works out more costly.I have a small car storage business which i have setup as a limited company. I rent the space from a landlord and sub let spaces to people to store and work on their cars. I make very little profit.
I am looking for a company to manage the books and prepare the companies house documentation. Taxez in Edinburgh came highly recommended, however they will not offer me any advice.
I want to know if the little profit i make can be used to pay me a wage or should i perhaps use this to buy tools to be used at the storage unit by the clients which i can then depreciate to zero value over say 2 - 3 years.?
What works in my benefit?
Any help appreciated.
What do you do outside of your limited company?
What are your income levels outside of the limited company?
Ray Singh said:
I have a small car storage business which i have setup as a limited company. I rent the space from a landlord and sub let spaces to people to store and work on their cars. I make very little profit.
Gross or Net?Unless you're pulling out mega dividends, one has to ask why bother. You're just working hard to make money for someone else, no?
You can currently take a monthly wage up to £758.33 without incurring either employee or employer national insurance.
That is also obviously below the zero income tax allowance.
You would therefore have no personal tax liability on that, assuming no other income. It would all come off the company profit therefore reducing the corp tax due.
The most tax efficient thing to do with the rest would be to either take a dividend up to the remainder of the personal allowance or pension contributions. Or a combination.
Buying stuff for the business also reduces the corp tax but I wouldn’t advise buying stuff for the sake of it to reduce the liability.
Edited to add if you do the wage you’ll need to register the company for payroll and submit the relevant information. You should be able to find a payroll provider for under £10 a month if you don’t want to do it yourself but most decent accountants will include it as part of a package with the annual calculations.
That is also obviously below the zero income tax allowance.
You would therefore have no personal tax liability on that, assuming no other income. It would all come off the company profit therefore reducing the corp tax due.
The most tax efficient thing to do with the rest would be to either take a dividend up to the remainder of the personal allowance or pension contributions. Or a combination.
Buying stuff for the business also reduces the corp tax but I wouldn’t advise buying stuff for the sake of it to reduce the liability.
Edited to add if you do the wage you’ll need to register the company for payroll and submit the relevant information. You should be able to find a payroll provider for under £10 a month if you don’t want to do it yourself but most decent accountants will include it as part of a package with the annual calculations.
Edited by trickywoo on Wednesday 13th December 17:20
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