No personal allowance left

[arrowone]

Because I am drawing a pension I have no tax allowance left.

I have spoken to accountant, contractors and surfed this web site and get conflicting advice:

1. Don't draw a salary, just dividends
2. Pay small salary rest in dividends
3. Draw only salary and bonuses not dividends

No.3 from contractors who have been in business long time and suggest options 1 & 2 run risk of drawing unwanted attention. No.3 guarantees quiet life.

I would welcome advice.

[Sockpuppet]

Because I am drawing a pension I have no tax allowance left.

I have spoken to accountant, contractors and surfed this web site and get conflicting advice:

1. Don't draw a salary, just dividends
2. Pay small salary rest in dividends
3. Draw only salary and bonuses not dividends

No.3 from contractors who have been in business long time and suggest options 1 & 2 run risk of drawing unwanted attention. No.3 guarantees quiet life.

I would welcome advice.

Go 2 and make the dividends spaced out (every year if you can afford it) which is less suspicous than monthly dividends.

[Lucifer Box]

No.3 from contractors who have been in business long time and suggest options 1 & 2 run risk of drawing unwanted attention. No.3 guarantees quiet life.

I would venture that should say "No. 3 from contractors who are clueless".

Are you working? If so, 2, otherwise 1.

[where did my id go?]

Do you need the extra cash and when are you intending to retire properly.
how much cash is there ?
How about take minimal salary then esc c.16 ?

[ratewhore]

I would venture that should say "No. 3 from contractors who are clueless".

Are you working? If so, 2, otherwise 1.

Are you saying if you are on the bench you should not be drawing a salary?

[Lucifer Box]

Are you saying if you are on the bench you should not be drawing a salary?

No. Option 3 was to only draw a salary. Even if you're on the bench you can still draw dividends as long as they're paid for out of retained profit.

[arrowone]

Thanks for the advice.

Just completed my first contract and looking for my second.

Not sure when I will retire permanently - 5 years max, sooner if I can't find a suitable contract.

Target daily rate 300 - 400

I probably need to draw around 1500 per month to live.

So what would be a reasonable salary / dividend ratio bearing in mind I have already used all my tax relief.

[Lucifer Box]

If you're not actually working at the moment, draw it all as dividends (paid for out of retained profit, of course).