LLPs and Salaried Partners
I have a client who is currently working via a managed service company, earning salary and dividend and claiming various expenses related to the jobs he undertakes. He works in a fairly specialised role for several client companies and his "jobs" can last anything from a couple of days to a couple of years, often running concurrently with each other. He is looking at his options in April when HMRC bring in the new MSC legislation. He has already decided that incorporating his own Ltd Co is an absolute last resort as he does not want the hassle or responsibility of being a director and having to oversee most of his own admin. His expected income based on last year will be borderline higher rate as well, just to complicate things!
He has been offered the option to join an LLP, where he will be paid via a combination of salary (they have said he will be a salaried partner and that his salary will be a minimum-wage level one) and profit-share on the balance of his gross weekly income, and has asked me for my opinion of the impact of such a scheme on his take-home pay. The advantage of this over continuing with his MSC is that he will still be able to claim the majority of his work-related expenses including mileage to his various projects.
I have told him I haven't a clue! But will do some research on his behalf and present him with some hopefully unbiased information. The first thing that appears to have come up is whether or not he can actually be a "salaried" partner and have profit share as well, it appears that he has to be one or the other.
The next thing is that assuming that this is the case and that as a salaried partner he will have to fund the partnership's employers NI on his wage out of his gross income, I feel that he would actually be marginally better off being taxed on his profit share anyway.
Your opinions and comments would be much appreciated, as I am groping in the dark here!
- Any reasons for a dissolved company to comply with HMRC requesting Corporation Tax and Tax Returns 31 1
- Salary Sacrifice andy subsistence payments 255 7
- RBS advising client they don't want his business 2,327 13
- Auto-enrolment staging dates, letters etc 105 4
- VAT FRS for a Formula 2 Racing Driver 88 2
- Overdrawn directors loan account. 919 21
- Can you have two types of sales? Sales with VAT and Sale without VAT? 343 9
- Company Structure 262 2
- The importance of Grammar 2,038 58
- Who is responsible for goods values for customs clearance? 35 1
- Accountant Specialization. 74 1
- Student Loan Box in Year Repaid 198 3
- What is the best acounting software for online international retail business? 244 1
- Director Liability 225 4
- Finding mobile numbers for clients we have lost contact with 385 5
- Travel and Subsistence Expenses 227 2
- Freelance/Employee 486 13
- 2 companies, one payroll 291 9
- Goodwill and the Summer 2015 Budget 344 1
- Complicated situation with very old balances from previous accountant 670 14
- Any knowledge of salesorder.com 399
- Chart of account segments; Balance sheet vs P&L 361
- Could and would anyone here carry out a hot file review of some non statutory audit work please? 341
- Electric Car 274
- S222 Charge 233
- IP trans to holding company 176
- Taxable Benefit for Director? 167
- Corporation tax penalties and fines on the CT600 158
- Software to Deal with Amazon and Ebay Sales 156
- Best way to convert Sage data to VT Transaction+ 153