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Max bennies min tax game


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BWW

So from db.s comment about jsa and esa I am understanding ....

2 years 7k wages gives 6mo jsa and 18mo esa.

Assuming you have liquidity and excuse to create ltd, employ yourself, put 100pct of salary in pension. How do the numbers stack up?

Over 5 or 10years say.

Assume the 130pct investment deduction may help. Will making airbnb shepherds hut work?

Some rules about closely held companies may need attention. Are their still small co retirement liquidation tax minimisation schemes?

System all so  complex surely we can get this to go cashpoz. Then needs moving to stealth?

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nirvana
On 07/05/2021 at 13:26, BWW said:

Assuming you have liquidity and excuse to create ltd, employ yourself, put 100pct of salary in pension. How do the numbers stack up?

how do you think they stack up if you're only paying min NI and not contributing to the fat greedy cunts getting even fatter? :P

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TMM
On 07/05/2021 at 12:26, BWW said:

So from db.s comment about jsa and esa I am understanding ....

2 years 7k wages gives 6mo jsa and 18mo esa.

Assuming you have liquidity and excuse to create ltd, employ yourself, put 100pct of salary in pension. How do the numbers stack up?

Over 5 or 10years say.

Assume the 130pct investment deduction may help. Will making airbnb shepherds hut work?

Some rules about closely held companies may need attention. Are their still small co retirement liquidation tax minimisation schemes?

System all so  complex surely we can get this to go cashpoz. Then needs moving to stealth?

Please can you dumb this down. I'd like to understand better. Thank you.

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spunko

A lot of effort mind. What about registering a Ltd company with you as sole director, trading for 18 months, losing the accounts in a skip and then waiting for the winding up process to kick in? Then repeat ten or twenty times. Phoenixing companies is the way to go, apparently. I'm minded to try it.

The number of times I see this on Endole or CompanyCheck, it's not even funny.

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BWW

So I'll try and add some numbers.

Basic structure: new Ltd company, wholly owned, you provide a loan to pay all activity [building the shepherds hut and set up as an airbnb], pay yourself a wage of 7k.

Will assume you have some taxable income so allowances all used but space in the 20% band [and same expected in retirement].

Wage of 7k, entirely paid into pension so zero income tax BUT will  be taxed when take it out of pension. 25% is tax free, 75% taxed at 20% so net 15% tax on both amount put in and gains/divis/interest.

NI to be paid on 7k depends on employment status/other NI. Ltd has to pay employers NI. 7k = 134/week

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

Seems to imply [but not say explicitly] nothing to pay below primary threshold 184/week for employee or employer.

Is that correct?

For someone not working, WTC of 204 x13 can be claimed. Have to say working 30hrs, not sure what limit is. Increases to 224 x 13 if salary drops to 6.5k. If you have any other income, this is gonna reduce to zero but AFAIR it's not means tested.

https://www.gov.uk/government/publications/rates-and-allowances-tax-credits-child-benefit-and-guardians-allowance/tax-credits-child-benefit-and-guardians-allowance#tax-credits-income-thresholds-and-withdrawal-rates

Please correct, I'm just remembering stuff I've read, never had experience of TCs system.

Do this for 2  years and you can get 6 months  JSA as well as 18 months ESA [posted by DB oo the big DB thread]. I assume they run concurrently and AIUI there's no means testing.

JSA = 74/week [2020] x 26 weeks = 1924

https://rightstobenefits.com/allowances/jobseekers-allowance/

esa = 74/week [2020] x 78 weeks = 5772

https://www.gov.uk/employment-support-allowance/what-youll-get

Don't quite understand why DB is saying you get 18 months with no payback if not really entitled but you just try a claim. Or maybe I misunderstood the method and you claim ME or the like.

Should be noted both those involve work coaches training courses and other such annoying shite.

Anyway just numbers we now have 3.5 years total where you've

Transferred 14k from non-wrapper savings [bank balance] to SIPP

Received 7696 in JSA and ESA less 20% tax would be ca. 6150? [Are they both taxable?]

So you've reduced savings by almost 8k and got 14k in your SIPP of which 25% [plus any gains to point of withdrawal] can be withdrawn tax free.

You've also got 3.5 years NI stamps that count towards pension if you didn't have them.

If withdraw 25% of 14k [3.5k] straight away, that's savings paid out almost 4.5k, to get 11.5k in your SIPP which will be taxed at marginal rates when you take it.

Next step. What does the company do and what expenses can be taken as part of activity in the ltd.

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AWW
3 hours ago, BWW said:

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

Seems to imply [but not say explicitly] nothing to pay below primary threshold 184/week for employee or employer.

Is that correct?

No. Employer's NI is due from secondary threshold, £170 a week.

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AWW

This is how I used to do it when I was allowed to, pre IR35:

Find a contract and start a Ltd Co.

Day rate paid into Ltd Co.

£40k employer contribution into SIPP.

Salary at secondary threshold.

Dividends of around £41k (whatever gets you to just short of the 40% tax band - don't forget untaxed interest on savings).

Same for the Mrs as a joint shareholder in the Ltd Co.

Wait a few years for a decent sized balance in the Ltd Co then do a MVL.

Have two years off.

Rinse and repeat.

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Wight Flight
10 hours ago, spunko said:

A lot of effort mind. What about registering a Ltd company with you as sole director, trading for 18 months, losing the accounts in a skip and then waiting for the winding up process to kick in? Then repeat ten or twenty times. Phoenixing companies is the way to go, apparently. I'm minded to try it.

The number of times I see this on Endole or CompanyCheck, it's not even funny.

Sad to tell you that this does actually work.

Just stop filing. Eventually it gets wound up. Nobody gives a toss.

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