New Company Tax Prob!

[rozzski999]

Hello,

I have just formed a LTD company, internetcartradelimited.

Basically I have a full time job, on a part time basis I buy the odd car, repair them and then sell them on, sometimes making a small profit sometimes not.

I probally turnover about 12 cars a year (Not many).

Each car costs me around £4000 and I sell them if possible for around £4500, like I said sometimes I make a bit of money sometimes I don't.

I have had to register the business due to my full time job, basically any other work that you do has to be registered hence I done this.

Now, I have had a letter from the Inland Revenue afer only two weeks asking about tax etc?

Is there a quick answer in relation to tax I have to pay,over the year I may clear around £5000 in profit. As I work full time is this tax taken into account with the new business or I am able to earn a tax free sum sum (!!) with the new business? Need to get this form back and dont want to get stiched up!

Thanks Again

Bob

 

[Alpha]

The form is most likely CT41G.

It is not asking you to pay tax simple getting details of the company.

As far as tax is concerned the limited company will pay tax at 19% of any taxable profits that it makes.

If there is any profit available after tax you can decide to leave the money in the company and therefore pay no extra tax or take the money out as dividends which if your total earnings from all sources are not above £36295 there will be no tax to pay on the dividend either.

 

[dcaccounting]

Alan

If Bob were to draw a dividend I agree that there will be no "personal" tax to pay, but is there not the 19% "CT" on the dividend taken and if the total payable dividend is less than 10k (profits being 10k or less as well) throughout the year you will have an excess dividend carried forward?

Regards

Dean

 

[Alpha]

Dean

Dont forget that the company has just been formed and he is unlikely to declare dividends before April 6th therefore my comment still holds.

As far as tax is concerned the limited company will pay tax at 19% of any taxable profits that it makes.

The £10k nil rate will disappear in the next tax year.