Tax!

[Marcoose]

My first year trading as a company is coming to an end and I wanted to ask some advice from the pros! Does anyone have and tips on how to minimise tax payable as a domainer/web developer?

I was thinking about reinvesting all of my profits (minus my approximate tax laibility for taking drawings) back into domains so as to minimise what I pay. This is just an example, perhaps not a very good one, but an example nonetheless!

Please share any legitimate tricks you have up your sleeves!

 

[Edwin]

Please share any legitimate tricks you have up your sleeves!

The best trick I know: get a good accountant.

That's not meant facetiously - they'll be able to give you much, much, much better advice than you'll get in the context of a forum thread, tailored to your specific situation, as it depends partly on how much business the company transacted, who owns the shares, what the person/people who work for the company earned, whether the company is registered for VAT or not, what its primary business model is, etc. etc.

Only an accountant will have the knowledge and experience to take that UNIQUE combination of factors and determine how to legally minimise the tax consequences arising from your situation.

 

[Marcoose]

Edwin - thanks for the post. I'm overseas until three weeks before my year end so won't have a huge amount of time to sort everthing out.

I just wanted to put the question out there incase there was any generic advice available. I won't be paying VAT this year but will be next year if that helps at all.

 

[Edwin]

Can't help for this year, but you should know that if you'll be registered for VAT next year that means quarterly accounts, due very soon after the end of each quarter, as HMRC want their slice of that VAT ASAP.

 

[wb]

minus my approximate tax laibility for taking drawings

Have you taken the money out of the company as a salary, dividend or loan?

 

[aZooZa]

Pay for an exclusive membership here as a write-off. Holy fu**.

 

[Marcoose]

Have you taken the money out of the company as a salary, dividend or loan?

WB - I've just been taking money out of my business account ass and when needed. any recommendations how to file this?

 

[Marcoose]

Pay for an exclusive membership here as a write-off. Holy fu**.

Good shout - Im just looking into this!

 

[Marcoose]

Can't help for this year, but you should know that if you'll be registered for VAT next year that means quarterly accounts, due very soon after the end of each quarter, as HMRC want their slice of that VAT ASAP.

Thanks for the heads up!

 

[TinkyWinky]

You can also offset some of your dev work as R&D.... (Not sure if you need to be Ltd for this) however get an accountant as this needs to be carefully presented - but we save half a big £xx,xxx salary thanks to that.

A good accountant will save you more than you are paying them - whichever way you look at it.

Also to think about, if you are in the Web Dev / Creating websites arena, I would personally go Ltd to protect yourself... you never know who will try and sue you these days and the Ltd company status protects you somewhat.

Good luck.
TW

 

[jwm]

WB - I've just been taking money out of my business account ass and when needed. any recommendations how to file this?

Are you running a Ltd company? If you are this a huge non no and you really need to sort this out before you hit your year end.

 

[max_rk]

WB - I've just been taking money out of my business account ass and when needed. any recommendations how to file this?

If you have taken money out of the company’s account as when you wanted it, you had to pay tax on it. HMRC can charge interest on unpaid tax.

As Edwin pointed out - get good accountant.

As soon as you can!

 

[Edwin]

Yes, HMRC won't accept "ignorance" as an excuse - they're very clear about it. So you need to get things straight NOW otherwise they can hit you with all sorts of fines and penalties. There is also a corporate governance aspect to this as, assuming that you're a director, you have a legal responsibility to make sure that the company keeps adequate accounts.

 

[Marcoose]

"You can also offset some of your dev work as R&D.... (Not sure if you need to be Ltd for this) however get an accountant as this needs to be carefully presented - but we save half a big £xx,xxx salary thanks to that."


Good tip! It wouldn't apply to me though as I'm a one man band.

 

[TinkyWinky]

"You can also offset some of your dev work as R&D.... (Not sure if you need to be Ltd for this) however get an accountant as this needs to be carefully presented - but we save half a big £xx,xxx salary thanks to that."


Good tip! It wouldn't apply to me though as I'm a one man band.

But that's the beef - get yourself an accountant quickly as this is exactly the sort of thing that you may be able to claim etc.

Good luck.