Do i need to pay my self
- Thread starter ross satchell
- Start date
Upvote
0
You are best paying a salary.
Unless you have experience of preparing compny accounts and personal and company taxation, you are going to come unstuck sooner rather than later. The cost of getting is wrong soon outweighs the cost of an accountant.
Good luck nonetheless.
Upvote
0
A self employed person can do their own accounts quite easily, limited company is more problematic and unless you know exactly what you are doing I think most would suggest you use an accountant.
Plus big time saving.
Upvote
0
I agree with getting an accountant, however if you don't do that yet you might like to consider:
Any salary you pay yourself reduces your company's profits by the amount of the salary, thereby reducing the company tax bill. You can pay yourself a salary without taking money out of the company - the payment is credited to the Director's Loan Account and effectively means you, as an individual, are lending that money to the company.
However, assuming you are already paying tax in your other job, the total amount of salary credited to you would be subject to your personal income tax and you would have to pay at least 20% to HMRC. As corporation tax is 19%, doing this costs you 1% tax, at least. You would also have to run a payroll system to do this.
If you pay yourself less than £680 per month there is no NI to pay.
Any salary you pay yourself reduces your company's profits by the amount of the salary, thereby reducing the company tax bill. You can pay yourself a salary without taking money out of the company - the payment is credited to the Director's Loan Account and effectively means you, as an individual, are lending that money to the company.
However, assuming you are already paying tax in your other job, the total amount of salary credited to you would be subject to your personal income tax and you would have to pay at least 20% to HMRC. As corporation tax is 19%, doing this costs you 1% tax, at least. You would also have to run a payroll system to do this.
If you pay yourself less than £680 per month there is no NI to pay.
Upvote
0
You dont need to pay yourself a salary.
That's how I started my business.. limited company working on the side, leaving the cash in the business as it got established. I didnt take a salary until year 3.
It may not be the most efficient way of doing it - you may end up paying more in tax - but it can be done if you want to.
Just set up a business with no employees, and dont register for paye
That's how I started my business.. limited company working on the side, leaving the cash in the business as it got established. I didnt take a salary until year 3.
It may not be the most efficient way of doing it - you may end up paying more in tax - but it can be done if you want to.
Just set up a business with no employees, and dont register for paye
Upvote
0
Latest Articles
-
At What Point Do Courier Losses Just Become a Cost of Doing Business?If you sell physical products online, you already know the feeling. You...- Ozzy
- Updated:
-
What I Wish I'd Known Before Using AI in My BusinessSomewhere between the headlines promising AI will transform everything...
- Ozzy
- Updated:
-
Is AI Making the Internet Worse?It started with a comment about music. @JEREMY HAWKE , a courier...
- Ozzy
- Updated:
-
The AI Divide: What UKBF Members Really Think in 2026Every few months on UK Business Forums, a thread appears that refuses...
- Ozzy
- Updated:
-
When the Algorithm Gets It Wrong: What eBay's AI Moderation Problem Tells Us About Platform RiskA thread appeared on UKBF this week that, on the surface, looks like a...
- Ozzy
- Updated: