Directors Tax

[wnc1981]

Hi,

I setup a limited company, myself as the only director. This was done for various reasons but my questions relates more to personal tax. Is it possible, to draw an irregular salary from the business and effectively pay annually like a sole trader?

The reason for this is that I'm a partner in another business which is subject to annual self assessment and I'm keen to try and keep it reasonably simple and not be both PAYE and Self Assessment?

One idea I had is maybe to set myself up as a consultant to the company as well as being a director, is the possible/legal etc.?

Thanks

 

[CDB]

You don't have to pay yourself a salary at all. You can just pay yourself dividends. Therefore you would not have to pay PAYE tax / NI & your tax affairs would be simpler.

I have seen self-employed "consultants" invoice their own ltd co. before but personally I would avoid it as there is a potential NI problem....

 

[Scalloway]

As a director you can take money out out of a company in two ways, salary or dividend, both of which would need to appear on your Tax Return. You can't be a consultant to your own company.

 

[elaine@cheapaccounting]

Have a read of this ....

Paying yourself by a monthly dividend - tax efficient or potential timebomb?

http://www.cheapaccounting.co.uk/blog/?p=1650

 

[MyAccountantOnline]

Hi,

I setup a limited company, myself as the only director. This was done for various reasons but my questions relates more to personal tax. Is it possible, to draw an irregular salary from the business and effectively pay annually like a sole trader?

Yes if you want to - dividends are probably more suited to this depending on the level of profits the company is making and your other income.

It's really something you need to take advice on from your accountant who will have knowledge of the company and your total income.

 

[MyAccountantOnline]

Our poor credit record is an obstacle for us to get a credit card approval.
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Andrew.

Sorry to hear that Andrew - but how is it relevant to this post?

 

[elaine@cheapaccounting]

Our poor credit record is an obstacle for us to get a credit card approval.
_____________
Andrew.

Very relevant to a spammer

 

[MyAccountantOnline]

Very relevant to a spammer

and there was me thinking the poster had mistakenly posted to the wrong thread....

 

[DeanCo]

Is it possible, to draw an irregular salary from the business and effectively pay annually like a sole trader?

If this is your only income it is recommended to pay yourself a minimum salary. This allows you to take advantage of your personal allowance £7,475 (2011 - 2012).

 

[MyAccountantOnline]

If this is your only income it is recommended to pay yourself a minimum salary. This allows you to take advantage of your personal allowance £7,475 (2011 - 2012).

The OP did mention in the original post he has partnership income so probably not relevant/approporiate.

 

[DeanCo]

The OP did mention in the original post he has partnership income so probably not relevant/approporiate.

Sorry, my mistake.

 

[MyAccountantOnline]

Sorry, my mistake.

Easily missed when a thread starts to have lots of posts