Business startup / PAYE

[Cardifftomo]

hello members,

I have a limited company on the verge ready to be made should I win a tender contract.

I have tendered for a contract but will be work 40hrs on the contract myself 160pm I would be the only employee and director of the business and the shared capital.

Now just wanted to ask can I?

1)PAYE myself £13ph for 160pm?
Client charge £14.40ph
2) will I get tax & NI heavy as I'm the director?
Currently working for somebody else on £26k but will leave this job.
3) can I take dividend out of the company at the end with profit?

Should I win the tender I am definitely getting an accountant this time in running a business.

 

[Scalloway]

1. As the director you can pay yourself what you want.

2. If you pay yourself £8,060 a year you get credited with NI but you do not actually pay anything. If you have no other income in the year you will pay no tax on it either.

3. You can pay yourself a dividend if your accountant does accounts that show a profit a and you do the paperwork confirming the payment. Remember to leave 20% of the available profit in the business to cover Corporation Tax

 

[Newchodge]

You will need to run a payroll, either doing it yourself, using something like HMRC basic tools, outsourcing to a payroll provider or getting your accountant to do it. Accountants may be expensive compared to a payroll provider.

 

[STDFR33]

£14.40ph x 40 hours x 47 weeks = £27,072

Corporation Tax after small salary: £3802.40
Income Tax: £545

Take home pay: £22724
Take home pay based on £26k in employment: £20,847
Take home pay based on £27k in employment: £21,527

Unless there is scope to increase earnings much more than the quoted £14.40ph, personally, I don't think it is worth leaving the security of employment for.

 

[Cardifftomo]

hi Accountancy Lab,

not sure if I am missing something but its £14.40ph x 40hrs x 52 weeks = £29,952
wages out @ £13.00ph x 40hrs x 52 weeks = £27,040
Corporation Tax = £582 and that's based on profit £2912 which it wont be time I look at an insurance, fuel, car etc

yeah defo worth leaving my currant job to start a new business and career.

 

[STDFR33]

hi Accountancy Lab,

not sure if I am missing something but its £14.40ph x 40hrs x 52 weeks = £29,952
wages out @ £13.00ph x 40hrs x 52 weeks = £27,040
Corporation Tax = £582 and that's based on profit £2912 which it wont be time I look at an insurance, fuel, car etc

yeah defo worth leaving my currant job to start a new business and career.

People usually don't work all year all year round.

You may also be caught by IR35 legislation.

Paying yourself £13ph from the company may mean you pay more tax than is legally necessary.