Limited company and tax

[PrivacyPolicy]

Damn. I felt dizzy after reading those few replies.

Accountant it is then ...

[dude69]

I have just started a new assignment and have my own limited company, which has never traded.

Can anyone advise how I pay tax/NI etc?

You need to register for PAYE: many company registration services do this as part of the registration fee. You should read the Businesslink site, it explains all of these things: http://www.businesslink.gov.uk/ - go to 'Taxes, Returns and Payroll/PAYE'

You will also need to register for VAT (you should use the flat-rate scheme, probably).

You should then set up an online egov account to deal with these things online, it's much easier.

How do I calculate it?

See the site above for full information, which links to here: http://www.hmrc.gov.uk/employers/working_out.htm

Does anyone have a sample spreadsheet which shows earnings (daily rate) and the tax liability on it?

Not really, because one of the reasons you've set up an LTD company is to avoid paying money out using PAYE (you do know why you've done this, right?). Some accountants recommend paying minimum wage, others a just below £8k, but personally I think you might as well pay yourself the personal allowance, £5225/year, at which level no PAYE tax is payable.

If you pay no more than £5,225/yr, then no tax will be payable, BUT as you are above the lower earnings limit, you still earn a pension/benefit stamp. Directors have special rules for NI, so you can actually pay this £5,225 as a single payment (which would otherwise create a massive NI liability, because NI is generally calculated each time you are paid, and you would be receiving £5,225 income for that month), rather than fiddle about making 12 monthly payments. See guide CA44: http://www.hmrc.gov.uk/nitables/ca44.pdf

If you pay yourself over £5,225, you would make a payment of NI and Income Tax by bank transfer using your company's PAYE reference every time you get paid. Other than that, the only thing you do (regardless of whether you earn £5,225, or more), is an annual PAYE return, which should be made online.

[NotAllThere]

Tell HMRC that you are trading and want to register for PAYE. HMRC will send you a PAYE pack which tells you how to calculate your tax liabilities. Or you can buy payroll software, like sage, that does it for you. Or you can hire an accountant.

[XLMonkey]

Yup,

an accountant is definitely your best bet. Once you've got your head around how a company works, you can do it yourself (but even then, you would probably need to buy a small business accountancy package to help sort it out for you), but it takes a while.

.

[Bear]

One answer:

Get an accountant! They're cheap and they'll sort all this out for you, at the very least they'll explain it in great detail.

If, after a year or so, you want to take it on yourself then fine - but at least you'll understand it fully by then.

In the meantime you won't upset HMRC by getting it wrong. Believe me, you don't want to upset HMRC (especially the VAT man! )

[PrivacyPolicy]

I have just started a new assignment and have my own limited company, which has never traded.

Can anyone advise how I pay tax/NI etc?

How do I calculate it?

Does anyone have a sample spreadsheet which shows earnings (daily rate) and the tax liability on it?

Many thanks