Yes thats right, my scenario is a ltd company with 1 director paying themselves via dividends every year. The student loan payment would be on the directors self assessment, I know that
You need to start getting your head around the fact that a limited company and its sole shareholder are two distinct and separate entities. Until you do that you cannot begin to calculate which scenario is better for you.
That's a cost to you out of your income. If your income is lower then zero or lower student loan payments. And you as director decide your income and the shareholder's dividend.
It's certainly is a popular topic. For many contractors, there is no choice as their engager will want them to operate though a limited company. It will be interesting to see what happens when the delayed IR35 changes ( due originally in April 2020) are implemented. Once private sector engagers become responsible for assessing whether contractors are personal service companies, things may change.
Additionally, with coronavirus, we have seen the government doing everything to save sole traders and companies that pay via PAYE. The downside of the dividend route wasn't obvious ( no-one really cared about not having a state pension) but has now been exposed. I suspect that in the post coronavirus clean up, the government is going address the lack of parity across business models with regards to National Insurance.
I think is should be abundantly obvious to anyone with a shred of consciousness that in avoiding payment of National Insurance you should think you're kissing goodbye to the bulk of social security type benefits, as that is the tax that predominantly pays for them. Surely, done properly, there isn't an effect on state pension (you get credits towards). At least, that is what my online pension account says; that I'm still accumulating years while taking most income as dividends. Is there actually anything to address? Don't pay, don't get. Seems pretty simple to me, just the "havecakeandeatits" will spoil things for the rest of us who are quite happy to take responsibility for our affairs within the rules set.
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