Do I need a bookkeeper or an accountant?

Check out our article on this topic that will help you consider this question and feel free to contact us to discuss.

Should I run my business as a sole trader or through a company?

Check out our article on this topic that will help you consider this question and feel free to contact us to discuss.

I am the sole director and shareholder of a Guernsey company. Can I pay my social security through my company?

No if you own 50% or more of the shares in a company that also employs you then you don’t fall within the definition of an employed person for Social Security purposes.  You must pay self-employed social security contributions which mean that they are paid out of your own money outside of the company.  You will also be assessed for social security contributions based on your earnings and share of the profits not just your salary.  If the company does pay your social security then this will be treated as additional money taken out by you (as a dividend or as a qualifying loan) and is liable to tax as well.

Do I pay tax on dividends paid out of my company?

Yes Guernsey trading companies pay a 0% rate of tax on their trading profits but once they are paid out as dividends then the company is required to pay the net dividend to the shareholder and pay the 20% tax element over to the Tax Office.  This is done via a distribution reporter system which we can submit for you.  You need to prepare dividend vouchers which are given to the shareholders and which they submit with their personal tax returns, along with an application for credit for tax paid.

Are there any tax implications if I borrow from my company?

Yes – loans to shareholders need to be declared via the distributor reporter system as per dividends. The company effectively loans the shareholder the net amount and pays the 20% tax element over to Income Tax. Loans must be declared quarterly and if repaid the repayment s reported to the tax office to request a refund of the tax paid.

Can I share my (tax) personal allowance with my partner when I am not working?

A single person may relinquish their Personal Allowance when the following conditions are met:

  1. You must be in receipt of family allowance in respect of one or more children.
  2. You must be cohabiting, i.e. living with another person as “husband and wife”, for the whole of the calendar year.
  3. The person relinquishing any of their allowance must have their tax returns up to date.

If these conditions are fulfilled and either you or your partner has income which is less than the Single Person’s Allowance, the Law includes provision for any unused Personal Allowance for the year of charge to be relinquished.

Any such relinquishment, once made for the year of charge, cannot be withdrawn unless the conditions cease to be satisfied, i.e. if you cease to cohabit during the year of charge, in which case the transfer of the allowance will no longer be allowed.