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You own the shares of your company and you are entitled to a distribution of it's profit by way of dividend.
You must remember that the company is a distinct entity seperate to yourself. You have seperate roles within it as an owner and as a director.
The company pays you a dividend as a shareholder as a distribution of profit and the company pays you remuneration as a director. In the absence of a service agreement there is no legal obligation to pay you as a director the NMW.
Using your argument on the how do you live on £100 - what i'm saying is that you don't, you live on the £100 pw salary and X amount in dividend.
This underpins the whole basis of share ownership and investment though it is without doubt that HMRC will change the legislation in the not too distant future. In the meantime though, it is legal and good tax planning. IMO.
I see, thanks for the clarification. I was under the impression that it was precisely because of the "living off dividend" argument that they could act against you. But as you point out, this is an investment which we are legally entitled to.
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