Basic Salary of £5,000?

**mrdavies** · 25 January 2007, 15:13

I've also heard somewhere, perhaps on this board, that its like waving a big red flag to the taxman, saying come and give me a good seeing too?

is this true? Me, I'm on the 10k basic and rest as dividends as recommended my splendid accountant

**hyperD** · 25 January 2007, 15:19

I was advised by my accountants, planIT, that the recommended salary should be no lower than £10,000 for directors for that F-117A look and feel.

**Nixon Williams** · 25 January 2007, 16:12

Yes the extra profit would be subject to tax buit we advise to at least take the minimum wage, which as £5.35 per hour work out at around £10,000

Alan

**Sockpuppet** · 25 January 2007, 16:34

I'm taking £5035 till at least April when the new tax year starts becuase of my half permie half contractor status this year I'll have earnt £40k in the eyes of HMRC.

**TheFaQQer** · 25 January 2007, 18:40

Seems to depend on the accountant you use.

My accountant recommends paying minimum wage (£5.35/hour) 40 hours a week, which is just over £10k.

A friend of mine pays himself just under the 0% threshold on the following argument:

1 - No-one is going to complain about not earning minimum wage, since he's the only employee

2 - He works for £5000 a year. Any hours over that that he works, he does out of love for the company, not for financial return.

I'm sticking with my accountants advice, rather than his!

**Maxamus** · 25 January 2007, 20:41

and im sticking with my accountants advice and leaving my salary at just over 10k a year

**Waldorf** · 25 January 2007, 21:25

seems a £10K salary is the norm, that is what I pay after advice from my accountant.

**VectraMan** · 25 January 2007, 22:23

I do the minimum wage thing too, as advised by the accountant, and I agree with the "not taking the piss" argument on that.

But as I understand it, directors aren't subject to the minimum wage legislation anyway, so basically accountants are advising us to waste a bit of money (which is not like them). So do the accountants have good reason to believe we're less likely to be investigated paying minimum wage?

**malvolio** · 26 January 2007, 08:40

It's been said why, a couple of times. As I recall, (a) it keeps you off Hector's radar, since the bulk of IR35 and S660 investigations seem to be against the £5k a year guys, (b) you are at least trying to run a business as opposed to using every available trick to save a few pounds a year and (c) who is to say what stupid ideas Gorgon and friends will come up in future based around the NMW thresholds.

Like everything it's a risk assessment - do you feel lucky?

Basic Salary of £5,000?