Expenses and paying yourself

Dr brick

Hi guys, I'm sure this has been brought up many times but I just want to ensure my line of thinking is correct.

Myself and two friends plan to set up a software development company. The best way to pay ourselves ensuring we will
minimise tax on profits assuming we make 100k profit, should we pay ourselves the max salary at the lower rate, above that maybe pay into a executive pension, and expense anything where possible?

One of my friends currently owns his own apartment, we plan to use this as office space expensing heat, broadband etc. He currently has a lodger under the rent a room scheme, is it possible to expense his living room as a business expense if we work from there?

Thank you in advance

mrawkward

is it possible to expense his living room as a business expense if we work from there?

It would, but he would then be liable for personal income tax on the rent!!

It may also be in conflict with the appartment complex management agreement.

Profit is after salaries and expenses have been paid, your 100K figure appears to be just the gross margin!!

RiseToMe

Just to put further emphasis on the apartment/management company rules, do have a look into this as most management companies prohibit using apartments in managed estates as a business addresses.

They find out pretty quick too, I registered mine to my apartment for ease of documentation for my wife and got a call pretty soon to say it was against management rules (I own my place and all my fees are paid in full and in advance), I do have a premises so I just moved it there but if you have no alternative it could be a headache.

Dr brick

Thanks very much for the feedback guys, I will get my friend to check out his apartment complex rules.