Tax Planning for Directors

Tax Planning for Directors

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Mr A has just purchased a new business and will own 70% of the share capital.  The remaining 30% of the shares are held by some external investors.

Mr A also has another limited company in which he owns 100% .  This company consists more of a consultancy service to a range of customers (5 clients) and currently turns over £130k pa.  (Non IR35)

The external Investors of the new business will not be working for the business and will not be receiving any remuneration just a proportion of the profits.  Mr A on the other hand will be working approx 80% of his time within the new business.  It has been agreed that Mr A is to be remunerated 60k pa.

Can anyone see any problem, if Mr A receives a nominal salary within the new business for his director duties and then the balance is recharged by way of invoice ( management charge) to his other company,  Within company B we can extract this by way of dividend and increase Mr A's effective net pay.

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