Hello all,
I would to apologize for the quality of my question as it may sound quite amateur, but I have just started working as a freelancer and I would like to see my taxation options. A friend told me that it is better to set up an ltd than as self employed, in terms of taxation.
My questions is based on the following example. Let's say that my company, with myself as the only shareholder, makes 30K per year.
I pay myself a salary of 10K per year (not taxable as it is in the tax allowance rate).
I also have expenses of 2K
This means that the rest 18K will have a corporate tax of 20% (3,6K)
First question
Do I have to pay myself (as ltd) at HMRC this 3.6K once per year (April)?
Then I give myself a divident of let's say 15K (or even the whole of the remaining amount 18K).
Second question
I will have to pay the 7.5% tax on this divident amount, is that correct?
Third Question
Do I have to provide payslips etc to myself for the 10K I will have as a salary?
I only need to do all the above once a year, is that correct?
Many many thanks
Panos
PS1. If my girlfriend makes the same amount of mine, does it make any difference if we will set up 1 company with 50% each or 2 different ones?
PS2. Is it better just to register myself as self-contractor?
I would to apologize for the quality of my question as it may sound quite amateur, but I have just started working as a freelancer and I would like to see my taxation options. A friend told me that it is better to set up an ltd than as self employed, in terms of taxation.
My questions is based on the following example. Let's say that my company, with myself as the only shareholder, makes 30K per year.
I pay myself a salary of 10K per year (not taxable as it is in the tax allowance rate).
I also have expenses of 2K
This means that the rest 18K will have a corporate tax of 20% (3,6K)
First question
Do I have to pay myself (as ltd) at HMRC this 3.6K once per year (April)?
Then I give myself a divident of let's say 15K (or even the whole of the remaining amount 18K).
Second question
I will have to pay the 7.5% tax on this divident amount, is that correct?
Third Question
Do I have to provide payslips etc to myself for the 10K I will have as a salary?
I only need to do all the above once a year, is that correct?
Many many thanks
Panos
PS1. If my girlfriend makes the same amount of mine, does it make any difference if we will set up 1 company with 50% each or 2 different ones?
PS2. Is it better just to register myself as self-contractor?
