Taxation - business and personal
This section contains general guidelines on tax. InTouch will you help be as tax efficient as possible at year end.
Controlling a limited company that you use to contract through sets up a series of legal relationships, which is often confusing to those new to contracting or running their own business. Keeping the business and personal taxes separate is key.
A limited company is a separate legal entity, meaning it enters into contracts, owns assets, will generate income and incur expenses all in its own right. It will also have its own bank account entirely separate from the director’s private bank account. Moving cash between a limited company bank account and a personal one is often more complex than it may appear and can have tax consequences. InTouch provides Limited Company accountancy, seek advice if you are unsure.
The Director / Shareholder relationship
Companies are owned by shareholders and operated by their directors; in most personal service companies these are the same people. As a director you are an employee of the limited company, and not self-employed. The fact you own some or all of the shares does not change this relationship.