How much salary do you take from your Ltd?

[Maslins]

OK ...quick numbers for anyone interested

Difference between paying yourself £5715 and £6475 is £97.28 Employers NI and £83.60 Employees

So the extra £760 attracts 15.6% in NI deductions rather than 21% CT, it's bigger than I thought..unless I worked it out wrong.

Tried to copy this:

Agree with the first bit, so total NI payable = £180.88.

Not sure I understand your "15.6% in NI deductions"?

Extra reduction in corporation tax of higher salary = 21% * (£760 + £97.28) = £180.03

Never looked at it in that much detail before, but by my reckoning you're a whopping 85p better off just paying £5,715 rather than £6,475. Plus, you get to keep the 180 quid until 9 months after the year end, rather than having to pay it over in the last couple of months of the year.

We typically go for £476/month (ie effectively £5,715), mainly because it saves the hassle of the client having to make an additional tiny tax payment.

[BolshieBastard]

I find it a bit of a feeble tactic, but my accountant (Quay/Clearsky) recommend this. £11k gross salary, £1k income tax, NI, etc.

What happens when you engage feeble accountants, I guess.

[Olly]

Tried to copy this:

Agree with the first bit, so total NI payable = £180.88.

Not sure I understand your "15.6% in NI deductions"?

Extra reduction in corporation tax of higher salary = 21% * (£760 + £97.28) = £180.03

Never looked at it in that much detail before, but by my reckoning you're a whopping 85p better off just paying £5,715 rather than £6,475. Plus, you get to keep the 180 quid until 9 months after the year end, rather than having to pay it over in the last couple of months of the year.

We typically go for £476/month (ie effectively £5,715), mainly because it saves the hassle of the client having to make an additional tiny tax payment.

Oooooooops...you're right!

I know I worked it once "correctly" and the difference was tiiiiiiny.
Perhaps the allowances were different.
Bugger, well up to NI level from now on then. My interest will swallow up plenty of the difference between the two (and probably did before come to think of it!)

Ooooooops once again
Thanks

[d000hg]

What happens when you engage feeble accountants, I guess.

I dunno, it seems the big names are split on this. Maybe they simply don't want to get messed about by HMRC themselves... a low number of investigations would be seen by many as a positive reason to choose an accountant, but of course it might mean they are too cautious.

[Sausage Surprise]

Had no idea it was mandatory to pay over 10K for IR35 insurance...interesting.

It isn't as far as I know

[db1]

Paying 6k

Over the nic minimum, under the personal allowance maximum. I think you should structure payments, according to the law, but in the most tax efficient way. I'll change this structure if and when tax laws change.

I don't think anyone is watertight as investigations are about an opinion someone has on evidence available. That said; if you're contracting in one place for 10 years and going to Christmas parties and all that then that's a bit silly.

[Fred Bloggs]

It isn't as far as I know

QDOS want you to pay £15k (IIRC) and they put up the policy excess if you pay less, (again, IIRC) but they do cover you. I take £10k salary.

[mudskipper]

Got the following from SJD yesterday:

We propose to keep your salary on the same principle as for 2009-10, so these are our defaults if we do not hear otherwise from you before 12 April 2010.

Recommended salary level: £7,500
National minimum wage level: £12,450 (increasing from £12,240)
c.Personal allowance level: £5,700
Other salary levels: No change from 2009-10

I'm on the 'recommended' £7.5K, although don't fully understand exactly why that figure is their recommendation.

[Wanderer]

Got the following from SJD yesterday: I'm on the 'recommended' £7.5K, although don't fully understand exactly why that figure is their recommendation.

They recommended 12k to me.

[mudskipper]

They recommended 12k to me.

How odd. Mine was signed SJD Accountancy (South). Maybe different regions have different figures.

It does worry me that there seems to be no accepted 'right' figure, even within one accountancy group.