Low salary through ltd

[pintofale]

Hi all, I have a consultancy which has one client and so far I have pushed all of the money from it into a SIPP as employer contributions to keep the accounts simple. If I decided to pay one of the directors a one-off salary of 9k, would I need to do anything in terms of PAYE or NICs? I believe it's under the radar for both (assuming the recipient has no other taxable income). Is it considered acceptable to pay a salary as a one-off like this or would it cause problems? Thanks!

[WTFH]

What has your accountant suggested?

We don't have the details of how your company is set up, or how you are running it, all we can go on is what you tell us. A few weeks back you wanted to buy an electric car through the company, now you're wanting to pay a "one off salary".
What is a one off salary?

What tax dodge are you trying for this time?

[Fred Bloggs]

Better get the skates on then. April 5th a week from now.

[WTFH]

Thanks for the reply! I don't have an accountant, that's why I'm asking for advice on the forum. I'm not sure what you mean by "tax dodge", that sounds a bit fishy, I am merely trying to extract money from my company for personal use in a way which complies with all of the appropriate laws of the land. By "one-off salary" I mean a one-off payment to a person my company designates as an employee for a service rendered - for example, it could be paying my wife for sorting out the admin.

OK, you really need to get an accountant for your company.

If someone is an employee, then they get a salary. It's not a one-off payment.
If someone is a director of the company, they might get paid dividends. These can be as a one off sum annually.

But if you don't have an accountant, who is helping you with the company's VAT submissions, corporation tax, etc?

[Snooky]

Hi all, I have a consultancy which has one client and so far I have pushed all of the money from it into a SIPP as employer contributions to keep the accounts simple. If I decided to pay one of the directors a one-off salary of 9k, would I need to do anything in terms of PAYE or NICs? I believe it's under the radar for both (assuming the recipient has no other taxable income). Is it considered acceptable to pay a salary as a one-off like this or would it cause problems? Thanks!

ISTR my IFA brother in law mentioning that HMRC can get a bit funny if someone receives large pension payments without a concomitant level of salary.

But that was a long time ago and my memory's shot, so I'm probably remembering it all wrong. Also, you may well have paid the SIPP beneficiary a reasonable level of salary earlier in this tax year.

[northernladuk]

That director would be the wife and this is just to maximise tax avoidance at the year end? Why not just tell us what the situation is without trying to hide it behind guff. Can't give you proper advice if you are hiding the real situation and trying to make it sound above board.

[Fred Bloggs]

HMRC's website explains reporting of salary payments rather well actually, including once per year payment.

Now there's a thing

[WTFH]

It’s always interesting when someone starts deleting their posts, makes you think they are trying to hide something that might show up the tax dodge they are trying to achieve.
But let’s look at what we know - in the other thread you said you were putting all your money into a SIPP for yourself and not paying out any salary or dividends.
Now I’m guessing you’re getting to the end of the tax year and want to extract some more cash while minimising the tax, so want to make you partner an employee, pay them out of the gross, thus reducing your CT.

Am I close?

[northernladuk]

Am I close?

To aggressive tax avoidance by structuring your businesses finances around tax and not business reasons? Yes