Can I pay myself £500 per month salary

[contractor243]

Greetings chaps,
I've been on the bench for a while now and had to reduce my monthly salary from £1000 to £500.
I'm starting a contract soon but would quite like to keep paying myself only £500/month rather than revert to £1200. Is this allowed? It would work out to an hourly rate below min wage. Does this matter? I'm not sure if it matters.
Regards, c243

[WTFH]

Are you a director of a limited company?
Do you have the funds in your company account?
Do you have an accountant?

Without seeing how you've arrived at the figure of £1200 or £1000, it's not straightforward to see what you're doing. Personally I'd be looking at £680 a month salary and the rest as dividends.
There's more here:
http://forums.contractoruk.com/accou...2017-18-a.html

[northernladuk]

Yes you can.

Do you have an accountant?

[SeanT]

Yes you can, there's no minimum wage for company directors or the self employed, and you should probably pay yourself an amount which aligns nicely with your tax code (so quite possibly £500 if you've been paying yourself £1000 for 5-6 months)

[mudskipper]

If you have a contract of employment with yourCo, then you need to pay yourself at least minimum wage. If you don't (as most of us don't) then you don't have to.

[psychocandy]

Bet 1 Bitcoin that OP hasn't got an accountant

[jamesbrown]

If you have a contract of employment with yourCo, then you need to pay yourself at least minimum wage. If you don't (as most of us don't) then you don't have to.

The correct answer.

[contractor243]

If you have a contract of employment with yourCo, then you need to pay yourself at least minimum wage. If you don't (as most of us don't) then you don't have to.

Thanks.

Are there any statistics or something to show most contractors don't have an employment contract with themselves? As I may need to prove this for another purpose. Thanks.

[northernladuk]

Thanks.

Are there any statistics or something to show most contractors don't have an employment contract with themselves? As I may need to prove this for another purpose. Thanks.

No statistics but the whole idea of the LTD company model is to be tax efficient and a core part of that is to pay up to the minimum tax threshold and rest in divs. Something you can't do with a contract of employment as you'll have to pay NMW.

That said most contractors don't even understand they aren't employed by their ltd. If you did a poll the results would be useless due to that lack of understanding.

In 10 years I'm yet to see a contractor on here or in real life with a contact of employment.

Ask your accountant. They will know who has and hasn't as a guide.

[BrilloPad]

That said most contractors don't even understand they aren't employed by their ltd.

As long as my accountant understands I don't need to.