Holiday pay necessary?

[richy]

Hi peeps, i'm taking 5 weeks off soon between contracts. Best I get my holiday pay out of the way during this period and pay myself 20 days holiday pay at 5.52 per hour?

Not sure if holiday pay is necessary for a director etc..
thx, richy

[r0bly0ns]

If you take a salary, then just keep paying yourself the salary for the time you take off.

[richy]

If you take a salary, then just keep paying yourself the salary for the time you take off.

atm i just pay myself for the hours worked on clients sites. 40hrs per week etc, paid monthy though PAYE at min-wage. so I can do the same, and pay for 20days @ 5.52 per hour if that's all I need to do!? or is it necessary at all?

[Sockpuppet]

A director you can pay yourself what you like when you like. Min wage and holiday dont apply for directors.

[richy]

A director you can pay yourself what you like when you like. Min wage and holiday dont apply for directors.

But i heard re IR35 that certainly paying the min wage looks better for the hours worked..

[ittony]

But i heard re IR35 that certainly paying the min wage looks better for the hours worked..

This is where the whole pay-yourself-minimum-wage argument breaks down for me. You say you're paying yourself NMW for the hours you work on client site, but what about all the rest of your work? What about all time spent on administrative duties, the hours spent looking for new clients and building up the business or the time spent travelling from your company's office to your client's site?

You'd need to pay an employee minimum wage for all of that, so why aren't you drawing the same? Because you're a director, that's why, and you don't have to pay yourself minimum wage for any of it. I don't think directors who take NMW for on-site hours are pulling IR35 wool over anyone's eyes, and arguably it looks more like disguised employment to base your salary on this aspect of the business alone.

Why not just pay yourself a fixed monthly salary and treat yourself to as much paid sick leave and holiday as your employer can stand. And while you're at it, why not make that monthly wage a tax efficient £5,225 / 12?

[richy]

Why not just pay yourself a fixed monthly salary and treat yourself to as much paid sick leave and holiday as your employer can stand. And while you're at it, why not make that monthly wage a tax efficient £5,225 / 12?

hi,

qdos require me to pay at min wage, but i take your point. so i've gone for a 12k per annum salary this year. simpler than calcing the hours, and minwage will be covered then easily too.

[Bomber]

Why not just pay yourself a fixed monthly salary and treat yourself to as much paid sick leave and holiday as your employer can stand. And while you're at it, why not make that monthly wage a tax efficient £5,225 / 12?

A silly question I suppose - Does anyone actually pay themselves £453 a month then just top up with divs?

I'm thinking this is the best plan but I have zero experience.

[Olly]

yes...ish

actually I plumped for 6K /12 just so it was a nice round number and some (probably vain) attempt to avoid any perceived net where they search their database for those being paid 453 a month

[ratewhore]

But i heard re IR35 that certainly paying the min wage looks better for the hours worked..

er what? What are you going to do if you're on the bench for months? Not pay yourself anything?

Sockpuppet is right, pay yourself what you want, when you want. Let your accountant advise you on how to split it...