Paying yourself through a Ltd as a subby

[pirate]

Ltd Co employs you to do work. You invoice them as self-employed. Seems simple, but you have to do your own personal tax return, pay tax on that, and any money you get as "dividends" is taxed as well. Why bother...unless you are earning a LOT of money. You get the money, you pay the tax, one way or another. Of course, if you can live on the personal income and not take dividends, them you can roll that into pension...Why give yourself the hassle, especially for monthly and quarterly returns and VAT etc. They will hunt you down...

 

[rolyberkin]

@essex why do you disagree with my comment? Maybe helpful for others if you actually explained why you think I am wrong!

 

[rolyberkin]

@essex why do you disagree with my comment? Maybe helpful for others if you actually explained why you think I am wrong!

 

[Deleted member 26818]

Ltd Co employs you to do work. You invoice them as self-employed. Seems simple, but you have to do your own personal tax return, pay tax on that, and any money you get as "dividends" is taxed as well. Why bother...unless you are earning a LOT of money. You get the money, you pay the tax, one way or another. Of course, if you can live on the personal income and not take dividends, them you can roll that into pension...Why give yourself the hassle, especially for monthly and quarterly returns and VAT etc. They will hunt you down...

OP doesn’t want to pay the £20-25 per week payroll fee.

 

[Nigel]

Isn’t that for corporation tax? The tax liability on dividends paid is personal tax?

Payment on account is for Company Directors PAYE.

 

[Toneyz]

Payment on account is for Company Directors PAYE.

We are not PAYE.
We are equal company directors we do 95% sub contract labour where 20% is taken by CIS the jobs we do we keep back 20% for corparation tax
our corparation tax bill is offset against expencises etc so far we have overpaid and get a BACS payment back.
our personal "wages" is made up of dirctors fee and dividends.
After our personal allowance we now pay personal tax on dividends
This for us is now have to be paid now on account so the HMRC have the money before we have made it.
Hope this makes sense.

 

[Nigel]

We are not PAYE.
We are equal company directors we do 95% sub contract labour where 20% is taken by CIS the jobs we do we keep back 20% for corparation tax
our corparation tax bill is offset against expencises etc so far we have overpaid and get a BACS payment back.
our personal "wages" is made up of dirctors fee and dividends.
After our personal allowance we now pay personal tax on dividends
This for us is now have to be paid now on account so the HMRC have the money before we have made it.
Hope this makes sense.

If you are taking a dividend and not a wage at all then that would be illegal and you would probably want to seek advice and delete all the messages in which you have admitted to that.

 

[rolyberkin]

If you are taking a dividend and not a wage at all then that would be illegal and you would probably want to seek advice and delete all the messages in which you have admitted to that.

This comment is complete and utter tosh!

 

[Toneyz]

If you are taking a dividend and not a wage at all then that would be illegal and you would probably want to seek advice and delete all the messages in which you have admitted to that.

what we take each week is made up of directors fee and dividend.
I have tried to explain the best way I can sorry I'm not an accountant.

 

[Nigel]

what we take each week is made up of directors fee and dividend.
I have tried to explain the best way I can sorry I'm not an accountant.

What is a 'directors fee'?

 

[Nigel]

This comment is complete and utter tosh!

Please explain?

 

[Toneyz]

What is a 'directors fee'?

What we are paid by the company for being a director.

 

[Nigel]

What we are paid by the company for being a director.

Also known as a wage?????

Are you for real?

 

[rolyberkin]

Please explain?

Your comment is simply not correct! Taking a dividend and not a wage is not illegal, neither is it an offence!

 

[rolyberkin]

Brookson - https://www.brooksonone.co.uk/knowledge-centre/limited-company/company-tax/directors-fees/