Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
I am working on your question ans should have a reply for you soon.
If you operate your personal training business through a limited company then the profits of the company will be taxed under the Corporation Tax (CT) regime at 20%. You can receive up to 5K of dividends in any one tax year and not pay any tax thereon, but dividends to not count in the CT computation so the company will still pay 20% on those.
One of the advantages of operating through a company is it places a buffer between you and the company in the event of some unfortunate claim.
I do hope that you find my reply of assistance.
Possibly not if dividends were below 5K in each tax year whether taken in one tranche or in penny packets. However, the company would still pay 20% CT on any surplus. You would effectively be paying tax at your basic rate if you kept within these parameters.
CT is at a flat rate of 20% irrespective of the quantum of the profit. It is what makes the UK a tax haven within the EU.
You do not have to take a dividend; you can always leave it in the company bank accounts. If you draw a salary from the company and are a director you are an employee per se and must be remunerated through PAYE channels. This could, of course, put you into a higher tax bracket whilst a dividend of up to 5K would not.
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Providing she has shares in the company she can receive dividends in proportion to her holding.
You can buy an off the shelf company from many of the company formation agents. It is relatively inexpensive, from a low as GBP 4-99. These days most have a capital base of 100 or 1000 shares and these you can subscribe for and allocate as desired.
There is an Annual Return to be made to Companies House which costs 13 quid. You may need to employ a local, trusted profession to prepare your annual accounts.
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Dividends can only be granted in proportion to the shares held. Thus a 10K dividend you suggest (5K x 2) would be 100 quid to your wife and 9900 GBP to you.
Your home insurance might be affected by the use of one room as an office, but this is now so common as to be unlikely in this day an age. It is, however a matter for the individual insurance company. Using your house as a accommodation address is unlikely to attract insurance attention and in any event a PO Box number would preclude this.