Salary paid to yourself.....

[SueEllen]

Seems like accountants recommend this salary or that salary, surely the accountants shouldn't make any recommendations on salary, yes they can talk about NIC savings etc, but I don't think they should recommend a certain salary.

This is something that director should set him/herself.

IMHO

The accountants recommendations are based on the law as they understand it.

As you are paying them to advise you then recommending a salary you should take fits into this brief.

[Jog On]

When I signed up with my accountants they insisted I pay myself £12k net. A couple of months ago I told them I want to reduce it to £589/month which is I think about the bare minimum to qualify for a state pension.

I don't understand terms like "artificially low salary" - what does that mean?

[orientalhoney]

What to pay yourself

I pay £8500 which is just over the minimum wage for 35 hours per week and pay my tax and NHI based on this. Good accountants are hard to come by, I think your Accountant is fine, just up to go ease your worries. If you dont trust your accountant then leave as its vital you have a good relationship otherwise you will always be worrying in the background! Good luck!!

[PinkPoshRat]

Ltd Co Question - How to live on £7K?

I'm about as confident as I'll ever be about starting my own Ltd and ditching the old brolly. Thanks to the very good wealth of knowledge from this forum's contributors - but.... I have just one nagging question.

I'll pay myself a salary of circa £7K, fine but how do I go about living off of that small amount? For instance the cost of my grocery bills and other 'goodies' I will buy will undoubtedly cost more than £7K.

So how does it work?

[Jog On]

I'm about as confident as I'll ever be about starting my own Ltd and ditching the old brolly. Thanks to the very good wealth of knowledge from this forum's contributors - but.... I have just one nagging question.

I'll pay myself a salary of circa £7K, fine but how do I go about living off of that small amount? For instance the cost of my grocery bills and other 'goodies' I will buy will undoubtedly cost more than £7K.

So how does it work?

You take the rest as dividends and director's loans

[Cr1spy]

I'll pay myself a salary of circa £7K, fine but how do I go about living off of that small amount?

My misses would burn through 7k in a couple weeks! (At least that's how it feels)

Dividend payments to the share holders (AKA you) is how it's done apparently.

[northernladuk]

I'm about as confident as I'll ever be about starting my own Ltd and ditching the old brolly. Thanks to the very good wealth of knowledge from this forum's contributors - but.... I have just one nagging question.

I'll pay myself a salary of circa £7K, fine but how do I go about living off of that small amount? For instance the cost of my grocery bills and other 'goodies' I will buy will undoubtedly cost more than £7K.

So how does it work?

How on earth can you even begin to be confident about starting your own limited when you do don't know the absolute bottom line, most basic of things about the most important aspect of your work?? You have been here long enough to see the posts, be aware of the newbies guides and so on. I really am speechless.

Re-read the newbies advice and all the stuff on the right about setting up LTD's and then search for Psychocandy and read every one of his posts. If you can't be bothered to research it you will find an answer there.

[PinkPoshRat]

Ok, so I also pay myself a dividend. Now have 2 questions;

Can this be done on an ad hoc basis?
Do I have to fill out forms to justify the dividend payment?

I'm starting to warm to the idea of going ltd...just need accountant and that leap of faith type push from someone

[northernladuk]

Ok, so I also pay myself a dividend. Now have 2 questions;

Can this be done on an ad hoc basis?
Do I have to fill out forms to justify the dividend payment?

I'm starting to warm to the idea of going ltd...just need accountant and that leap of faith type push from someone

Jesus. Go read the newbies guides on the absolute basics of your job and/or get an accountant. Seriously. I am embarrassed for you.

Personally I would push you back towards a permie role, it is going to get a lot more complicated than this.

[Jog On]

Ok, so I also pay myself a dividend. Now have 2 questions;

Can this be done on an ad hoc basis?
Do I have to fill out forms to justify the dividend payment?

I'm starting to warm to the idea of going ltd...just need accountant and that leap of faith type push from someone

It's a good idea to try and take the divis quarterly but there's no actual rule/law saying you have to. What I do is take monthly director's loans then cancel them out with divis.

You need to do dividend slips but your accountant should be able to help you with that.

Running a LTD involves quite a bit of paperwork and deadlines but the amount you do vs what your accountant does will depend on how much you pay them.