What's the point in setting up a company and paying dividends?!

[northernladuk]

Thanks to all of you for your words of wisdom. We don't pay salaries (not enough profit unfortunately) so PAYE/NI considerations are out. And we don't hold the property in the company, we rent it (cheaply, again due to not much profit) from the shareholders/directors. So the ltd company is effectively a booking agent. As I understand your posts, there's no point in paying a dividend. Even if we make the basic rate tax payer the sole shareholder we still pay 20% CT on the profits versus paying her the £2000 for doing the administration and her paying 20% income tax...

Who told you to set it up this way? Did they not go through all this with you?

[kingcook]

Thanks to all of you for your words of wisdom. We don't pay salaries (not enough profit unfortunately) so PAYE/NI considerations are out. And we don't hold the property in the company, we rent it (cheaply, again due to not much profit) from the shareholders/directors. So the ltd company is effectively a booking agent. As I understand your posts, there's no point in paying a dividend. Even if we make the basic rate tax payer the sole shareholder we still pay 20% CT on the profits versus paying her the £2000 for doing the administration and her paying 20% income tax...

I'm not following you. You have a contracting company that pays no salary because it's not making enough profit? What does your limited company do?

[jmo21]

I'm not following you. You have a contracting company that pays no salary because it's not making enough profit? What does your limited company do?

try reading the OP....