Paying salary in one go

[psychocandy]

OK. For those of us who pay the most tax efficient salary to themselves (£7500 or whatever).

Reason I understand is that its because this way no tax or NI is due (although no NI is credited) which leaves just CT on any dividends.
BUT, I guess, if for whatever reason, part way through the year you stop paying a salary, then it could end up with the situation that you don;t use your full tax allowance.

So, why not just pay yourself the whole £7500 up front at the start of the year when you can? Is there any reason you can't do this? Apart from the fact that it looks a bit dodgy I guess.

[yasockie]

Among other reasons, because the opposite might be true - you'll get a permie job and you'll want to stop paying yourself to avoid higher tax rate.

[Clare@InTouch]

Because it would create a loan to you as it's due in equal instalments over the whole year, with the associated benefit in kind and s455 implications of a loan over £5k.

When the loan limit increases to £10k you'd avoid the BIK, but the s455 still needs to be considered.

[GazCol]

OK. For those of us who pay the most tax efficient salary to themselves (£7500 or whatever).

Reason I understand is that its because this way no tax or NI is due (although no NI is credited) which leaves just CT on any dividends.
BUT, I guess, if for whatever reason, part way through the year you stop paying a salary, then it could end up with the situation that you don;t use your full tax allowance.

So, why not just pay yourself the whole £7500 up front at the start of the year when you can? Is there any reason you can't do this? Apart from the fact that it looks a bit dodgy I guess.

Is this a serious question?

[psychocandy]

Because it would create a loan to you as it's due in equal instalments over the whole year, with the associated benefit in kind and s455 implications of a loan over £5k.

When the loan limit increases to £10k you'd avoid the BIK, but the s455 still needs to be considered.

Sure I read somewhere that salary does not have to paid in equal installments. Its just normally done this way.

[jamesbrown]

Fill yer boots:

http://forums.contractoruk.com/accou...y-advance.html

[psychocandy]

Fill yer boots:

http://forums.contractoruk.com/accou...y-advance.html

LOL. And I even posted in this thread. Which is why I remembered it!

[GazCol]

LOL. And I even posted in this thread. Which is why I remembered it!

I refer back to my post above!

[Clare@InTouch]

Sure I read somewhere that salary does not have to paid in equal installments. Its just normally done this way.

The salary is spread over 12 months so as not to incur any NI or tax. You could have the whole amount due in month 1 but then you'd have an NI liability and a tax liability. I think there have been threads about this before and paying in arrears, so paying the whole lot in month 12 as you'd then have a whole year's worth of allowances to play with. It was also an RTI solution used by some people I believe.

[Craig at Nixon Williams]

The salary is spread over 12 months so as not to incur any NI or tax. You could have the whole amount due in month 1 but then you'd have an NI liability and a tax liability. I think there have been threads about this before and paying in arrears, so paying the whole lot in month 12 as you'd then have a whole year's worth of allowances to play with. It was also an RTI solution used by some people I believe.

Here you go...
http://forums.contractoruk.com/accou...-yearly-2.html