Financial vehicle required for renovations

[Sarah_W]

I decided last year to start renovating properties - have completed and sold my first one and it went a lot better than expected. I'm shortly onto no 2, but am considering doing this through a Ltd company so I can keep retained profits and pay less tax on them (CGT at about 21/21%).

Main downside I can see is how to pay builders etc as I can't put them on the company payroll and most of them are sole traders, not registered companies.

Advice please! :-)

[Simpo Two]

The builder sends your company an invoice and your company sends them a cheque, signed by the authorised signatories.

I'm a sole trader and that's how companies pay me...

Or am I missing something?

[Spudler]

Simpo Two said:

The builder sends your company an invoice and your company sends them a cheque, signed by the authorised signatories.

I'm a sole trader and that's how companies pay me...

Or am I missing something?

...nope...thats pretty much the jist of it. Only other thing is deducting tax from sub-contractors with CIS.

[touching cloth]

Is corporation tax not higher than the new flat rate of CGT?

[B17NNS]

Simpo Two said:

The builder sends your company an invoice and your company sends them a cheque, signed by the authorised signatories.

I'm a sole trader and that's how companies pay me...

Or am I missing something?

Thats how I work. I'm a sole trader and generate invoices for my clients.

[Beardy10]

touching cloth said:

Is corporation tax not higher than the new flat rate of CGT?

I think that's right...it's 18% isn't it ?

[Sarah_W]

Spudler said:

Simpo Two said:

The builder sends your company an invoice and your company sends them a cheque, signed by the authorised signatories.

I'm a sole trader and that's how companies pay me...

Or am I missing something?

...nope...thats pretty much the jist of it. Only other thing is deducting tax from sub-contractors with CIS.

Not heard of CIS, but it now mkaes sense:
http://www.businesslink.gov.uk/bdotg/action/detail...

Are most tradesmen registered with this scheme? I could imagine a few odd looks if I suggested paying them less because I'm "paying" their tax directly under CIS!

[Simpo Two]

When I started trading years ago I was fascinated by the fact that I could send somebody a piece of paper with a price on it, and they would send money in return

[Tuscanless Ali]

Sarah_W said:

Are most tradesmen registered with this scheme? I could imagine a few odd looks if I suggested paying them less because I'm "paying" their tax directly under CIS!

Yes, most are registered, and when you verify with HMRC how to pay them you will either pay them Gross or deduct 20%, if they are not registered you will be told to deduct 30%.

Every month you then have to file a return detailing who you have paid, how much and how much has been deducted under CIS, you then send a voucher to the sub-contractor detailing the same.

[Grandad Gaz]

Tuscanless Ali said:

Sarah_W said:

Are most tradesmen registered with this scheme? I could imagine a few odd looks if I suggested paying them less because I'm "paying" their tax directly under CIS!

Yes, most are registered, and when you verify with HMRC how to pay them you will either pay them Gross or deduct 20%, if they are not registered you will be told to deduct 30%.

Every month you then have to file a return detailing who you have paid, how much and how much has been deducted under CIS, you then send a voucher to the sub-contractor detailing the same.

Yes, as above.

It's a pain in the ar*se but, make sure you do it!!
The taxman has more powers than God