when to pay employers NI and co-orp tax

[Mart001]

Newbie question, I'm trying to work out my savings on going ltd, looked at books and other threads but its just not clear. what do i pay employers ni on and coop tax on?

Do i pay employers ni on every thing that comes into the company or just on the employees wage.

and

do i pay coperation tax on everthing that comes in or only on whats left after paying the wages i.e. profit?

Many thanks

[QwertyBerty]

With all due respect if you're asking Qs like that you need to find yourself an accountant.

QB.

[Mart001]

like the question said just started to work out the benefits, its ok i worked it out.

[Just1morethen]

Read the guides. Its all there.

But yes, you do need an accountant - and pretty quickly.

PM me, I might be able to help.

[Mart001]

thanks just1morethan, its ok I have time,

QB I might get an accountant but for the time being I just wanted to do some calcs, why cant anybody just answer the question?

its just I never found anywhere that actually says " you pay employers NI on the amount of the employees wage" yes it says you have to pay employers NI but... and the same with cooporation tax which is just on profit.

currently I am in a brollie and i have just started calculating ltd with the turn of a renewal coming up.

[Just1morethen]

OK then. Quickly, here's how it (normally) works):

Weekly income from contract: £1,000
Less: expenses 100
900
Salary 100 (You pay no tax or NI on this)
Dividend 800 (You pay CT on this @ 21%)
Less: CT 168
Net dividend 632
Add back in salary 100
Net available to yuo 732

(You can increase the approx 4% if you join VAT flat rate scheme)

[Archangel]

The company pays Employers NI on any gross salary paid to employees (above the lower limit for NI)

The employee then has employees NI and PAYE tax deducted from his gross pay and receives the rest net.

The company pays corporation tax on its profits, i.e. its income (less VAT + any flat rate VAT consideration) less its expenses (such as wages).

The PAYE and NI is normally due monthly, (or quarterly if < something like £500)

The Corp tax is due 9 months after the company yearend.

HTH

[ASB]

Originally Posted by Just1morethen

OK then. Quickly, here's how it (normally) works):.....

The risks with the way you have described this are, the OP might just infer that no tax or ni is payable on any salary, CT is only paid on dividends actually paid.

Maybe the following is better (but probably not):-

Weekly income from contract: £1,000
Less: expenses 100
900
Salary 100 (No employer NI payable due to less than threshold, no income tax payable if sole income due to less than allowance)You pay no tax or NI on this)
Gross Profit 800 (You pay CT on this @ 21%)
Less: CT 168
Net profit 632

Available for dividend now or in the future 632. Note, when the total income including dividends exceeds the higher rate threshold then 25% of net dividends on this portion will also be due as higher rate tax.

[Just1morethen]

I did say "quickly" and I did say read the guides!

[ASB]

Originally Posted by Just1morethen

I did say "quickly" and I did say read the guides!

Of course. Perhaps I should have used a tongue firmly in cheek smiley.