benefits of being a company?

thepaddyfla

my business is a company and im just wondering what ways i could get money out of the business without paying myself wages ie i dont want to get hammered with tax.
or even is there some saving/pension schemes i could pay into that i would gain tax relief

bbsrs

thepaddyfla wrote: »

my business is a company and im just wondering what ways i could get money out of the business without paying myself wages ie i dont want to get hammered with tax.
or even is there some saving/pension schemes i could pay into that i would gain tax relief

Engage the services of an accountant.

capefear

Hi

These are generally the only afew ways you can take money out of a company.
1. Expenses that are incurred wholly, exclusively and necessarily in the performance of the duties of the employment.
2. Wages: the more you put through as salary the more tax you pay, so less is best within reason .
3. Pensions: just say you have a profit of 17205 at year end you have two options
A. You leave this money in the company and pay corp tax on it and also the close company surcharge or
B. pay this profit into your pension and by doing this you dont have to pay corp tax etc. The only thing to take into account with pensions that you are restricted to the amount you can put in each year depending on age.
4. Civil Service mileage and subsistence rates. See IT54 & 51. These are your expenses that you don't need a receipt for but need to keep a diary. A word of warning here, these expenses can be a good way to get money out of the company but don't take the pizzz as has been mentioned on many other posts its great paying no tax and taking excess expenses for all types of mileage and subsistence etc but when you have to try and explain these mileage and excess expenses at a revenue audit thats when the fun starts. And according to a tax specialist I was talking to last week the revenue are doing a lot of desk audits on motor expenses & subsistence etc. So you just need to be smart in how you claim these expenses. Eg say you need to stay an over night in a hotel, pay the hotel using your personal laser card. Say the hotel costs you €50.00 you can claim back €140 ( i dont have correct figure to hand) using the civil service overnight rates, once you keep a log in your diary no receipt needs to be kept just who you had the meeting with and you submit and expense form to the company for €140 and your up €90.00.
As I said just be clever and dont talk the pizzz.

Also just bear this in mined, as you are now self employed you and the other director are taxed at prsi rate S depending on how your share are split so you wont have the same entitlements as paye workers if the business goes belly up.

For more on expenses You should read the IT51 & 54 information leaflets from the revenue and become familiar with the civil services expense rates you can claim for mileage and subsistence.

Best of luck with the new business

HTH

Sakinah

I went to an accountant recently, he told me this:

Expenses (but you have to be able to stand over what you process, in case you get audited
Interest back from the company on a Directors Loan (sounded like a good option but smallish amounts of cash)


Remember if you don't pay yourself a salary and it goes belly up, you'll get no dole money as you didn't pay PAYE/USC!

digzy

Op, I've been in a similar position. Everyone saying 'incorporate' to 'change' your tax rate to 12.5% etc...company pension etc.......
I'm neither qualified or capable of explaining the minutae but I'd be a little wary of accountants advising this. I may be cynical but it's in their interest for you to do this. Also, any money you withdraw in a personal capacity is taxable income. Incorporation is no panacea to paying tax.

thepaddyfla

capefear wrote: »

Hi

These are generally the only afew ways you can take money out of a company.
1. Expenses that are incurred wholly, exclusively and necessarily in the performance of the duties of the employment.
2. Wages: the more you put through as salary the more tax you pay, so less is best within reason .
3. Pensions: just say you have a profit of 17205 at year end you have two options
A. You leave this money in the company and pay corp tax on it and also the close company surcharge or
B. pay this profit into your pension and by doing this you dont have to pay corp tax etc. The only thing to take into account with pensions that you are restricted to the amount you can put in each year depending on age.
4. Civil Service mileage and subsistence rates. See IT54 & 51. These are your expenses that you don't need a receipt for but need to keep a diary. A word of warning here, these expenses can be a good way to get money out of the company but don't take the pizzz as has been mentioned on many other posts its great paying no tax and taking excess expenses for all types of mileage and subsistence etc but when you have to try and explain these mileage and excess expenses at a revenue audit thats when the fun starts. And according to a tax specialist I was talking to last week the revenue are doing a lot of desk audits on motor expenses & subsistence etc. So you just need to be smart in how you claim these expenses. Eg say you need to stay an over night in a hotel, pay the hotel using your personal laser card. Say the hotel costs you €50.00 you can claim back €140 ( i dont have correct figure to hand) using the civil service overnight rates, once you keep a log in your diary no receipt needs to be kept just who you had the meeting with and you submit and expense form to the company for €140 and your up €90.00.
As I said just be clever and dont talk the pizzz.

Also just bear this in mined, as you are now self employed you and the other director are taxed at prsi rate S depending on how your share are split so you wont have the same entitlements as paye workers if the business goes belly up.

For more on expenses You should read the IT51 & 54 information leaflets from the revenue and become familiar with the civil services expense rates you can claim for mileage and subsistence.

Best of luck with the new business

HTH

Thanks vaary much for the info. I had a look at the revenue website very helpful in relation to the mileage side of things as I drive over30 km a week to do lodgements stock collection etc. so when I have these records collected When i put a claim in to the company for them is the payment tax free or is it considered as wages / salary.

EG I drive 3000kms for company related business @ 50 cent a km = 1500 euro am I not liable for tax on that? I am a director but not a shareholding director and I only receive a salary ie I'm only a company employee.

Itchianus

thepaddyfla wrote: »

Thanks vaary much for the info. I had a look at the revenue website very helpful in relation to the mileage side of things as I drive over30 km a week to do lodgements stock collection etc. so when I have these records collected When i put a claim in to the company for them is the payment tax free or is it considered as wages / salary.

EG I drive 3000kms for company related business @ 50 cent a km = 1500 euro am I not liable for tax on that? I am a director but not a shareholding director and I only receive a salary ie I'm only a company employee.

Hold on, I'm confused; you've said a couple of times that it's your company, and how can you pay yourself etc... so how can you not be a shareholder in your own company?!

Attabear

Sakinah wrote: »

I went to an accountant recently, he told me this:

Expenses (but you have to be able to stand over what you process, in case you get audited
Interest back from the company on a Directors Loan (sounded like a good option but smallish amounts of cash)


Remember if you don't pay yourself a salary and it goes belly up, you'll get no dole money as you didn't pay PAYE/USC!

As far as I know, payment of PAYE/USC has no bearing on dole payments.

It's the PRSI that's the issue and there seems to be some confusion as to whether the OP is a proprietary director or not.

thepaddyfla

my partner is a shareholding director i'm just a named director( for now.)ie its a family company and eventually ill be a shareholding director, so as for now i'm looking towards the future.

Itchianus

thepaddyfla wrote: »

my partner is a shareholding director i'm just a named director( for now.)

Well then congratulations, you're already well on the way to creating a fine mess for yourself, both from a legal and a tax point of view!

thepaddyfla

my mistake for not explaining full background details at start

Itchianus

thepaddyfla wrote: »

my mistake for not explaining full background details at start

You do realise that as a non-shareholder you are now working FOR your "partner", and that in the event that the company is profitable you actually have no say in what level of salary, benefits etc you are entitled to...? Your partner can shaft you in any number of different ways and there's no legal comeback for you.

Also, as the company generates profit its shares increase in value - so if/when you acquire a shareholding, whether by buying a new issue of shares or by your partner transferring some of his/her shares to you, there are a whole range of tax issues.

Messy, messy, messy - getting that situation sorted, and securing your interest in what you describe as "your" company should be your immediate priority.