Advice on setting salary level

[Alan @ BroomeAffinity]

Advice on setting salary level

When I asked him about it, he said that he'd suggest his clients to make national insurance contribution to qualify for state benefits. Now I'm thinking whether he knows enough to be a competent accountant.

Ian

That would appear to betray a fundamental lack of basic knowledge. If you pay £8060, you pay no NI but your benefits are protected. I'd be concerned about what else
he doesn't know.

And some good advice from WordIsBond up there.

[Michael at BI Accountancy]

If it were me, I'd be asking my accountant why he recommends £11K instead of £8K, since it costs extra taxes and the extra hassle of PAYE, and if the answer weren't satisfactory, I'd be thinking this accountant doesn't know enough for me to trust him in future, and be moving. It is hard for me to think of any satisfactory answer an accountant could give.

This!

Also how did the £14k come about??

[WordIsBond]

That would appear to betray a fundamental lack of basic knowledge. If you pay £8060, you pay no NI but your benefits are protected. I'd be concerned about what else
he doesn't know.

And some good advice from WordIsBond up there.

OP, let me translate that for you into plain English. Here's what Alan really means:
"Your accountant is obviously rubbish and doesn't know what he's talking about. But since I'm an accountant, too, and don't want to be seen bashing another accountant, and since I don't know quite every detail of your situation, it's a little awkward for me to say so explicitly. Since WIB said it already, I'll just refer you to his comment."


Honestly, I think you need another accountant. My accountant isn't a classic contractor account and costs more, makes sense for me because of my business but probably wouldn't make sense for you. Several I've noticed contribute here frequently that seem to know what they are about. Alan is one, Jessica at Whitefield Tax, Martin at Contratax (first guy I'd contact if I were changing, probably), Chris Maslin. There's probably others I'm forgetting because I'm getting old. Nixon Williams seems to have a very good reputation among posters here. One frequent poster here shills for Gorilla Accounting all the time, he's obviously very happy. SJD used to be popular but based on comments not so much anymore.

There's a whole thread at the top of this forum that includes local recommendations if you want someone face to face.

Edit: Heh, heh. Michael popped in while I was posting. Yeah, he seems to know his stuff, too. I said I'd forget some.

[ian2013]

OP, let me translate that for you into plain English. Here's what Alan really means:
"Your accountant is obviously rubbish and doesn't know what he's talking about. But since I'm an accountant, too, and don't want to be seen bashing another accountant, and since I don't know quite every detail of your situation, it's a little awkward for me to say so explicitly. Since WIB said it already, I'll just refer you to his comment."


Honestly, I think you need another accountant. My accountant isn't a classic contractor account and costs more, makes sense for me because of my business but probably wouldn't make sense for you. Several I've noticed contribute here frequently that seem to know what they are about. Alan is one, Jessica at Whitefield Tax, Martin at Contratax (first guy I'd contact if I were changing, probably), Chris Maslin. There's probably others I'm forgetting because I'm getting old. Nixon Williams seems to have a very good reputation among posters here. One frequent poster here shills for Gorilla Accounting all the time, he's obviously very happy. SJD used to be popular but based on comments not so much anymore.

There's a whole thread at the top of this forum that includes local recommendations if you want someone face to face.

Edit: Heh, heh. Michael popped in while I was posting. Yeah, he seems to know his stuff, too. I said I'd forget some.

Thank you for the advice. One additional question: given I've been on £14k for a few years and paying tax and NI, now moving to a £8k is a large reduction of salary, will this catch the tax people's attention and cause unnecessary troubles(e.g. they may decide to audit me because of this)?

[northernladuk]

Thank you for the advice. One additional question: given I've been on £14k for a few years and paying tax and NI, now moving to a £8k is a large reduction of salary, will this catch the tax people's attention and cause unnecessary troubles(e.g. they may decide to audit me because of this)?

Nope. Plenty of people take big rises and falls in salary. 6k isn't a lot. Even if they do you aren't doing anything wrong.

[ASB]

If you want to wring out every last penny the the question is at what point the additional NI paid exceeds the corporation tax saved.

This is around the 8,800 mark. Obviously the calculations are different if the employers allowance can be obtained.

[kaiser78]

So if you are paying for anything that could be treated as a BIK and your accountant hasn't asked you about this and moved you to paying it through the company, then once again, maybe you need to think about another accountant. But if you do have any BIKs, and he is still recommending £11K salary, time to contact somebody who has a brain to go with the title "accountant."

My accountant has also recommended that my salary should be £11k and not £8k, on the basis of 2 lts director setup. Are they in effect wrong ? This has got me worried now

[missinggreenfields]

My accountant has also recommended that my salary should be £11k and not £8k, on the basis of 2 lts director setup. Are they in effect wrong ? This has got me worried now

If your company is claiming the EA, then they are right. If your company is not claiming the EA, then they aren't right.

[northernladuk]

If your company is claiming the EA, then they are right. If your company is not claiming the EA, then they aren't right.

This... When they (am talking to Kaiser78 here) give you a figure they should be able justify it and you should be able to understand it. To say they give you a figure of 11k and you don't understand why isn't that clever when you are responsible for it. It's not wrong, it's just based on some assumptions you should have understood

[kaiser78]

This... When they (am talking to Kaiser78 here) give you a figure they should be able justify it and you should be able to understand it. To say they give you a figure of 11k and you don't understand why isn't that clever when you are responsible for it. It's not wrong, it's just based on some assumptions you should have understood

Yes, you are very right. And I thought I did understand it and was fine with the reasoning of £11k until I read this thread, which has then confused me. It seemed to be going against what had been explained to me, ie taking £8k only instead of £11k and not taking the EA.

Truth be known, I am still a little unsure around all of this now.