Salary From PLC Whilst Employed Elsewhere

[paulus]

Hi

This is my first post so I hope I've put this in the right place. Also, if this has been asked before, sorry but I couldn't find anything :)

I have a question regarding a PLC I set up in February. I'm currently in full time employment and my PLC is just something I do in my spare time. Revenue will probably be around £XXX - £XXX/year. I was wondering how I should divide that money into salary and dividends (I'm the only employee).

Is there any need for me to even take a salary from the PLC as I'm already being paid a salary by my full time employer, and therefore have the NIC covered?

Thanks for any help.

[MyAccountantOnline]

It will really depend on your salary from your fulltime job and other income as to what is most tax efficient for you. Generally a combination of salary and dividends is good.

If you want to pay a salary from your company you'll need to register with HM Revenue & Customs as an employer and deal with the PAYE matters unless you use an accountant to do it for you.

[paulus]

That was quick response! Thanks for that.

It will really depend on your salary from your fulltime job and other income as to what is most tax efficient for you.
Full time salary: £XXX
Income from PLC: £XXX (say)
No other income.

[Williams lester]

The question must be....why a plc rather than ltd for such a small income?

[elainec100@cheapaccounting]

OK firstly I think you mean a limited company not a PLC.

As regard salary v divs have a read of this:

http://www.franklyaccounts.co.uk/fivesalary.php

As you have a full time job - I would suggest divs only based on info provided.

Have a read of your free guide:

Limited Company – Do you know what you’re getting into?


http://www.cheapaccounting.co.uk/mailsltdcoguide.pdf

[MyAccountantOnline]

Based on that you could pay a small salary from your company to use up the 20% tax band but I'd agree dividends for the rest.

I did assume you didnt really mean a plc;)

[paulus]

I'm obviously losing my mind. It is a ltd not a plc. Duh!

Thanks for the links Elaine, I'll have a look at those shortly.

[elainec100@cheapaccounting]

Based on that you could pay a small salary from your company to use up the 20% tax band but I'd agree dividends for the rest.

I did assume you didnt really mean a plc;)

why not pay all as divs ?

[elainec100@cheapaccounting]

I'm obviously losing my mind. It is a ltd not a plc. Duh!



thanks for clarifying :)

[MyAccountantOnline]

why not pay all as divs ?

Paying a small salary would give a small CT saving - but maybe not worth the hassle?

[paulus]

Paying a small salary would give a small CT saving - but maybe not worth the hassle?
Thanks for explaining Nicola. I'm guessing that the CT saving would be small on the figures I've quoted?

I like the idea of avoiding hassle though, and I think my best option would be to take all the money from my company as dividends.

Thanks very much for all the help.

[MyAccountantOnline]

Thanks for explaining Nicola. I'm guessing that the CT saving would be small on the figures I've quoted?

I like the idea of avoiding hassle though, and I think my best option would be to take all the money from my company as dividends.

Thanks very much for all the help.

Yes it would be a very small saving, probably easiest as Elaine suggested just to take dividends. But keep it in mind if you reduce your hours at work or cease employment.