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Start up accountancy advice

  • 03-08-2012 9:19pm
    #1
    jonniebgood1
    Registered Users, Registered Users 2 Posts: 3,578 ✭✭✭


    I asked this in the taxation section but got no help so I hope it is ok to ask the same here: I am looking at setting up a limited company with a colleague. We are looking at what salaries to pay our selves (less than lower threshold) and after that at the different ways that people can then legally draw money from the company- I'm looking for advice on the most beneficial way to set up and emphasise not illegal ways.

    We will be putting private funds into the company. Question 1 is should we label these as loans and repay the sums to ourselves. If we do this can we avoid paying tax as the company re-pays us. The point being that as the money was earned privately over the past no. of years tax was already payed on it.

    We have 2 vehicles lined up for company use. We assumed that to transfer them to the company name and then operate them on company diesel would be the way to go. Question 2 is whether it is more benifial to transfer vehicles into our private names and then claim expense for them. I suspect not as repairs etc and vehicle replacement will come into it at some stage.

    The company will use storage sheds that belong privately to me. Q3= Can the company rent these off me and what are the tax implications of this situation. I bought said shed privately and they are separate to my home. Could rates be applied to the sheds in a country location?

    My colleague has privately owned equipment that we will need to use in our work. Question 4 is can the company rent this off him and what are the tax implications of this.

    Thanks for any help on this.


Comments

  • #2
    J.Ryan
    Registered Users, Registered Users 2 Posts: 474 ✭✭J.Ryan


    jonniebgood1 wrote: »
    I asked this in the taxation section but got no help so I hope it is ok to ask the same here: I am looking at setting up a limited company with a colleague. We are looking at what salaries to pay our selves (less than lower threshold) and after that at the different ways that people can then legally draw money from the company- I'm looking for advice on the most beneficial way to set up and emphasise not illegal ways.

    We will be putting private funds into the company. Question 1 is should we label these as loans and repay the sums to ourselves. If we do this can we avoid paying tax as the company re-pays us. The point being that as the money was earned privately over the past no. of years tax was already payed on it.

    Yes, you will have to pay for the additional shares that are issued, but any other assets/cash advanced to the company can be considered a loan and be repaid tax free in the future



    jonniebgood1 wrote: »
    We have 2 vehicles lined up for company use. We assumed that to transfer them to the company name and then operate them on company diesel would be the way to go. Question 2 is whether it is more benifial to transfer vehicles into our private names and then claim expense for them. I suspect not as repairs etc and vehicle replacement will come into it at some stage..

    If the company ownes the vehicles and you use them privately them you will have to declare and pay BIK on them, if you own them privately then you can charge expenses (sheets will have to be kept), its hard to give an answer on this with having a better idea of annual business mileage and runnign costs of the vehicles.

    jonniebgood1 wrote: »
    The company will use storage sheds that belong privately to me. Q3= Can the company rent these off me and what are the tax implications of this situation. I bought said shed privately and they are separate to my home. Could rates be applied to the sheds in a country location?

    The company can rent the sheds (or buy them), the cost would have to be an an open market value, I would imagine that they would be liable to rates, but cannot say for certain. Employers and Public Liability Insurance would also be an issue.

    If you hire the sheds to the company you would pay tax on the rent you received less any relevant expenses, however a full tax return showing all earnings and claims would need to be submitted, as a proprietary director, this would be the case anyway.
    jonniebgood1 wrote: »
    My colleague has privately owned equipment that we will need to use in our work. Question 4 is can the company rent this off him and what are the tax implications of this.

    Yes and as paragraph 2 in the answer to Q3

    Thanks for any help on this.[/QUOTE]

    Your Welcome, feel free to ask any other questions


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