Setting up a limited company

[stevenperrett]

I am setting up a limited company but haven't started trading yet. Whilst I am about to open a business account, I'd like to know how I am meant to pay myself? Can I withdraw money from the business account to pay rents etc? How do I justify all of this?
I expect to be registering with PAYE so that I am becoming an employee of my company, as I am the director.
Do I require an accountant for all of this?

Please advice.

Many thanks,

[craig1]

Start here!

[Clare@InTouch]

It's worth appointing an accountant if you've never done this before and you're unsure on the basics, a good accountant will save you more than they cost you. Plus, they will be on hand to answer all your initial questions about paying yourself, taxes, expenses etc. You may find that by year two or three you're comfortable doing it all yourself, but make sure you get a good grounding first (whether via an accountant or a lot of research).

To pay yourself, assuming you're outside IR35, it's a mix of salary and dividends that go into your personal account. Your own personal rent would come out of your personal account as normal. It's possible to charge rent (or use of home) to the company depending on how much you work from home and any incremental costs.

If you're married it's worth thinking about issuing shares to your wife, and maybe an admin salary if she doesn't earn elsewhere. It's hard to give advice in this area without knowing your full personal tax situation, including prior earnings.

The most important thing to remember is that you and the company are totally separate beings, don't make the mistake of thinking the company bank account is yours to use personally. Things get messy that way, and there can be tax consequences.

Generally you can claim any expenses that you NEED to incur in order to run the company, although there are some rules that are far from black & white.

Are you VAT registered yet? If not, have a look at the benefits of the Flat Rate VAT scheme, it could be profitable for you.

[TheFaQQer]

I am setting up a limited company but haven't started trading yet. Whilst I am about to open a business account, I'd like to know how I am meant to pay myself?

You pay yourself from the funds in the company. If there are no funds, then you can accrue the debt that the company owes you until there is money to pay you.

Can I withdraw money from the business account to pay rents etc?

Yes. Depending on what you are paying, though, there may be a BIK charge to pay

How do I justify all of this?

If the expense is solely and exclusively for the business (with some exceptions) then that's the justification. If it isn't a business expense and you claim it, then you pay tax on it as if the sum had been received as income.

I expect to be registering with PAYE so that I am becoming an employee of my company, as I am the director.
Do I require an accountant for all of this?

From these questions, I'd say certainly.

[northernladuk]

I don't know whether to use the coffee spit animated gif or the facepalm one.

It beggars believe that people start down the path of business without knowing how to pay themselves?? Wouldn't that kind of be the first thing you ask????

Plenty of people have asked our esteemed OP to read the guides so I don't need to this time I guess but just to expand on Craigs link I would point the OP to the full list of useful guides on the right, not just the first timers one. If you are struggling how to pay yourself it is going to be long slow going at first.