My ltd has been trading since mid-April. As of now, I haven't taken any salary or dividends. I've had no other income from other sources.
I'd like to extract some funds. I realise starting with a salary is the most efficient initial source because it's an expense and so my company will save on corporation tax. I contacted my accountant who said: "the salary we recommend is £8,060 as this is the National Insurance threshold". Is this correct? I thought the £10,600 was recommended because I'd be making the minimum national insurance contributions?
Anyway, the above is a minor issue. My main question is - can I take the salary as a single payment? I'm unsure how much more income my company will be earning until next April and so I'd preferably like to take the full salary payment now and then the rest as dividends. Is this possible? I've read that some directors take their pay as a single payment but, again, my accountant recommended against this as: "salary is intended to be taken regularly over the relevant months, and if you were to take the full amount then HMRC may deem that you are taking above this threshold and tax accordingly.".
If the above is true, does this mean I can't take out more than roughly half of this years £10,600 (or whatever) allowance (because it's September) because otherwise HMRC would think I was earning much more? I'm sorry - I'm a little hazy on how the PAYE stuff works (I've only ever dealt with it as a permit).
I'd appreciate any advice on this - I'm rather confused!
Thanks in advance.