Keep money in Ltd company

[PCTNN]

Hi

Apologies if this is a stupid question, but I'm pretty new to how Ltd companies work.

Let's say I land a contract outside ir35 and can work through my Ltd company. Do I legally HAVE TO pay myself a salary or can I leave all the money in the company and then maybe start paying myself a salary at a later date (for example after the contract ends)?

[hobnob]

You don't have to pay yourself a salary. There are various reasons why you might not want to (e.g. if you're currently doing a contract which is inside IR35 and your limited company doesn't have any income).

You can take a salary when you're out of contract.

Since you're new to this, I recommend getting an accountant to help you with the company's finances.

[PCTNN]

You don't have to pay yourself a salary. There are various reasons why you might not want to (e.g. if you're currently doing a contract which is inside IR35 and your limited company doesn't have any income).

You can take a salary when you're out of contract.

Since you're new to this, I recommend getting an accountant to help you with the company's finances.

Thanks. I'll definitely speak an accountant.

So, to give more information on why I'm asking, I have the chance to take 2 part time contracts, one inside ir35 and paid via umbrella company and one outside ir35 via my ltd.

I can easily live off of the money from the inside ir35 contract so I was wondering if I could leave the money from my outside contract in the ltd since I don't need it now. Thanks for confirming it is a viable option.

I'll still speak with an accountant.

Cheers!

[northernladuk]

As a director you are not constrained my National Minimum Wage so under no obligation to pay yourself a salary.

Depending on your stage in life and current financial situation it might be worth considering sticking as much of the inside money in to a pension so it doesn't get taxed at all (kind of) and living off the LTD one.

Accountant is your friend here.

[eek]

Thanks. I'll definitely speak an accountant.

So, to give more information on why I'm asking, I have the chance to take 2 part time contracts, one inside ir35 and paid via umbrella company and one outside ir35 via my ltd.

I can easily live off of the money from the inside ir35 contract so I was wondering if I could leave the money from my outside contract in the ltd since I don't need it now. Thanks for confirming it is a viable option.

I'll still speak with an accountant.

Cheers!

Yuo need to speak to an accountant. But because of the way NI works it makes sense to pay yourself (continually) a small amount (say £800 a month or whatever the figure is that's below employer / employee NI) from the limited company as that would only be subject to income tax and not NI.

[PCTNN]

Depending on your stage in life and current financial situation it might be worth considering sticking as much of the inside money in to a pension so it doesn't get taxed at all (kind of) and living off the LTD one.

pretty good idea there, which I hadn't considered. Thanks!

[ChimpMaster]

Also take the tiny dividend you're able to tax free:
How much is the tax-free dividend allowance in 2023/24? (contractoruk.com)

[Ketto]

As a director you are not constrained my National Minimum Wage so under no obligation to pay yourself a salary.

Depending on your stage in life and current financial situation it might be worth considering sticking as much of the inside money in to a pension so it doesn't get taxed at all (kind of) and living off the LTD one.

Accountant is your friend here.

+1 - opportunity to really boost your pension pot if that is a priority for you.