Low salary

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Bluebird replied

24 September 2007, 14:51
Originally posted by beermeister View Post

Just thought of a further question on this one....

I originally setup the Ltd company long before I started contracting and de-registered from PAYE by writing a letter to HMRC saying that I wasn't trading - all legit, and no more yellow forms to send in.

Now I've been trading for a few months (and paying myself below the PAYE and NI thresholds), so can I just keep going like this, or do I need to tell HMRC and fill in nil returns each quarter?

I'm happier to continue with the no forms option if it's all legal.

IF you pay any salary at all [ whether its below thresholds or not ] you have to register for PAYE.

I think most accountants advise you to register and pay something rather than not py anything at all - there is nothing illegal at all is paying nothing, but the assumption is that HMRC are more likely to look at non-paye companies than those you do pay.
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beermeister replied

24 September 2007, 12:28
Just thought of a further question on this one....

I originally setup the Ltd company long before I started contracting and de-registered from PAYE by writing a letter to HMRC saying that I wasn't trading - all legit, and no more yellow forms to send in.

Now I've been trading for a few months (and paying myself below the PAYE and NI thresholds), so can I just keep going like this, or do I need to tell HMRC and fill in nil returns each quarter?

I'm happier to continue with the no forms option if it's all legal.
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beermeister replied

18 September 2007, 13:37
I de-registered from PAYE a while ago.
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TheFaQQer replied

18 September 2007, 12:55
You may as well "suffer" the paperwork burden to get the NI stamp though.
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xoggoth replied

18 September 2007, 12:21
AFAIK paying low salary or even not paying any salary still leaves you with problem of having to send quarterly nil returns and keeping all those stupid records. Unless you can deregister from PAYE, not sure if you can or if it's wise.

PS You can send nil returns by email, takes about a minute.
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DaveB replied

18 September 2007, 12:19
Originally posted by beermeister View Post

I probably didn't phrase a question very well because I don't think I completely got to the bottom of one of my earlier posts...

Forgetting the argument over minimum wage, and forgetting the fact that I'd be opting out of state pension...is there anything wrong with paying myself a salary of just below tax free threshold AND NI threshold so I don't have to bother with filing any monthly/quarterly returns to HMRC?

If so, what would be the maximum I could pay myself to avoid any of the HMRC form filling?

Technically speaking there is nothing wrong with it at all. As a Director you dont *have* to pay yourself anything at all.

Minimal Salary + Divi's is the generally accepted way to go. Just how minimal you make it and what that might do to your chances of getting a tax investigation are open to some quite heated discussion elsewhere on the forum.
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beermeister started a topic Low salary

18 September 2007, 12:01
Low salary

I probably didn't phrase a question very well because I don't think I completely got to the bottom of one of my earlier posts...

Forgetting the argument over minimum wage, and forgetting the fact that I'd be opting out of state pension...is there anything wrong with paying myself a salary of just below tax free threshold AND NI threshold so I don't have to bother with filing any monthly/quarterly returns to HMRC?

If so, what would be the maximum I could pay myself to avoid any of the HMRC form filling?
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