How Do I Pay Myself? - Start-Up

[UserA]

Hello Everyone,
I have recently set up my own recruitment firm and I would like to know how I go about paying myself?
As I have not got a business loan, I am not in the best position to pay an accountant although I hope to be in a better position soon. I have been told I should pay myself through PAYE however someone else has said this is not necessary as during the first few months I may not make any money.
Also, is there anything else I must do as the company director? I plan to run the firm by myself until it is not feasible and I don't want unnecessary costs.

Any advice would be greatly appreciated

 

[STDFR33]

You can pay yourself a salary and take the money later.

Whilst I appreciate funds might be tight, what you do now in the early stages can often end up much more costly than engaging an accountant from the start.

 

[STDFR33]

I hope the ban you soon

 

[Lynxdry]

You can pay yourself a salary and take the money later.

Whilst I appreciate funds might be tight, what you do now in the early stages can often end up much more costly than engaging an accountant from the start.

STDFR Can you clarify the above statement with regards to paying one's self now but collect the money later? so basically lets say I want to pay my self 50K per year but as a new business that is not making enough per month to cover the salary can I then input the salary into PAYE and get the tax code associated with such a salary now, but then after lets say 6 months I collect 25K minus tax and then end of 12 months collected the remaining 25K minus tax thus in fact generated payslips showing an annual salary of 50K?

 

[STDFR33]

You process payroll as normal.

The net salary will get posted to your directors loan account. You can draw down from your loan account when funds permit.

A £50k salary is likely to cost you far more in tax than necessary. You need to speak to an accountant to get things like this right.

 

[Lynxdry]

@STDFR33 thanks for that clarification, how do I set up a directors loan account, because I recently transferred money from my personal account into the LTD company account and I asked my bank to place the words director's loan as the reference for payment, must I now ask my business account provider to set up some special kind of account? any recommendations for a accountant in the London Area?

 

[STDFR33]

The directors loan account will need to be set up in your bookkeeping software.

Sorry, no recommendations for London. If you don't mind working remotely, I have a recommendation though.

 

[Lynxdry]

Sure would look into remote options please PM details @STDFR33 thanks in advanced.

 

[Newchodge]

I am not an accountant, so I have no axe to grind. Your posts strongly suggest that it may cost you a ot more NOT to seek an accountant's advice, than to seek it.

 

[Paul Norman]

I am not an accountant, so I have no axe to grind. Your posts strongly suggest that it may cost you a ot more NOT to seek an accountant's advice, than to seek it.

I second this. Strongly.

Unless you understand the stuff you are asking questions about you could make mistakes.

And the HMRC does not act kindly towards mistakes, even if they are made in all innocence.

Getting your payroll done will probably not cost much. In the big picture, neither will an accountant.

 

[duggimon]

Also, is there anything else I must do as the company director? I plan to run the firm by myself until it is not feasible and I don't want unnecessary costs.

Any advice would be greatly appreciated

It's already not feasible. Without wanting to be overly harsh, you don't understand the first thing about the relationship between yourself and the company and what is entailed in keeping things in order and minimising tax.

Accountants don't all demand fees right off the bat and will be sympathetic to a startup looking to minimise initial costs before the income starts coming in. You should go and see one. Or even better go and see several.

 

[UserA]

Thank you everyone for taking the time to reply.
I will look into an accountant asap as I don't want to make any mistakes that would cost me more in the future.