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HiI have a ltd company and have the choice of paying myself paye or through dividends. I works as an it contractor but am NOT covered by IR35. I cover a lot of miles and have considerable expenses when it comes to mileage, accommodation, meals, etc.Q. Whats the better and more profitable way to pay myself through the company? In which case can I claim the mileage at 40/25p per mile and what else can I claim with it in terms of other expenses?
Optional Information: System of Law: England-and-Wales Already Tried: nothing yet
Hello, if you have any questions or need further clarification after reading my answer please let me know.
A combination of salary up to your personal allowances (£675 pm) and the rest in dividends .... but it also depends on individual circumstances
If you are using your own vehicle for business, there is no reason why you can't charge the business for business mileage at HMRC approved rates.
Other expenses to consider are
-use of home if you carry our any adman or other tasks (£3 pw)
- overnight accommodation costs and overnight meals
- office stationery
- telephone and internet
You will find expenses listed on SEFN 8 helpful and you can view it here
http://www.hmrc.gov.uk/worksheets/sa103f-notes.pdf
If you need more information please let me know.
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Experience: FCCA
I use my own car, phone, home as office, etc..Problem is also I'm talking about 2010-11 her as well because I didn't do ANYTHING regarding the accounts for that period due to a difficult family situation and my mental state (I just wasn't able to do anything about it) and I remember returning the PAYE form back to HMRC "nothing to pay" :( ooops I know NOW - BIG MISTAKE either way but I can always write them a nice letter, apologise and send them a cheque with the letter and calculations. If they fine me something, fair enough. Do you think thats the best way to proceed?
Thank you for your response
If you did not draw any salary for the year 2010-11, then filing a nil return is okay.
If you are operating as a LTD company, you should prepare the company accounts in the normal way and file them.
Show no salary. Instead, treat payments to you are reimbursements for mileage claim and other out of pocket expenses and the rest as dividends. These dividends are distribution of taxed profits of the company.
Your company will be fined for not making an annual return.