Hi all, I'd appreciate some advice on my current situation.
I operate as a one man limited company, implementing the fairly standard method of a salary up to the Primary Threshold (i.e. around £8.5k) and dividends when appropriate.
Due to personal circumstances, over the last two years my income has been very limited - in 2017 I made a small profit, and in 2018 I just about broke even. My financial situation has been so straightforward that I decided against using an accountant and have filed my own accounts as a micro entity - partly to save costs, but also because I have the time and have found it an interesting experience.
This year, so far I earned around £6.5k, and unless anything dramatically changes before xmas, that may well be it for the year. My monthly salary payments up until September take me up to around the same amount, meaning that I will just be in profit at this point. If I pay myself next month, I would then be operating at a loss.
So, I figured the best thing to do is to stop paying myself until the end of the year. Firstly, I've reached the Lower Earnings Limit (LEL of £6136) which is important for NI. Secondly, as I submit my own accounts and want things to be as simple as possible, it's better to be operating as a profit, rather than at a loss, which I can only assume would be a lot more complex for me to handle without an accountant.
How do my assumptions sound to you? Do you think this is the best way forward, or is there anything fundamentally wrong with this which you would advise against? Of course, I'm hoping that next year things will improve and get back to normal, i.e. operating at a profit!
Thanks in advance.
I operate as a one man limited company, implementing the fairly standard method of a salary up to the Primary Threshold (i.e. around £8.5k) and dividends when appropriate.
Due to personal circumstances, over the last two years my income has been very limited - in 2017 I made a small profit, and in 2018 I just about broke even. My financial situation has been so straightforward that I decided against using an accountant and have filed my own accounts as a micro entity - partly to save costs, but also because I have the time and have found it an interesting experience.
This year, so far I earned around £6.5k, and unless anything dramatically changes before xmas, that may well be it for the year. My monthly salary payments up until September take me up to around the same amount, meaning that I will just be in profit at this point. If I pay myself next month, I would then be operating at a loss.
So, I figured the best thing to do is to stop paying myself until the end of the year. Firstly, I've reached the Lower Earnings Limit (LEL of £6136) which is important for NI. Secondly, as I submit my own accounts and want things to be as simple as possible, it's better to be operating as a profit, rather than at a loss, which I can only assume would be a lot more complex for me to handle without an accountant.
How do my assumptions sound to you? Do you think this is the best way forward, or is there anything fundamentally wrong with this which you would advise against? Of course, I'm hoping that next year things will improve and get back to normal, i.e. operating at a profit!
Thanks in advance.
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