Ltd company questions

[northernladuk]

You really need an accountant to go through all this with you. Which will cost you around 2k as it happens

[rsw]

Yes, self employment is an option but this is my first company and I'd like to give it an initial boost.
Sorry if my post was long, but I think key questions I'd like your opinion on please are:

- If I sign up for PAYE, do I have to pay myself every month or can it be variable on a month by month basis?

- Say £X comes in every month -- what do I lose out of that amount? employer NI contribution, employee NI, employee income tax. Anything else? is pension mandatory in this case?

- If I employ myself in this new ltd company (call it B) (current day job (call it A) allows that), then I change my day job, would the new job (call it D) automatically be taxed at BR and indicate that I have an employment with B although I quit A?

Thank you

[northernladuk]

TL;DR. Can't you just be a sole trader for that much money?

[NotAllThere]

You don't have to operate payroll if you're not receiving a salary, however, it may not be the best way, and it's probably safest to pay yourself minimum wage. Use HMRC's basis tools.

It's probably not worth the hassel of a ltd.co. with your setup. Have you considered being self-employed for the projects outside of your day job?

You should also check your employment contract to make sure you're not in breach by taking on outside work. Usually it's a condition that your employer must give permission.

[rsw]

Hello,
I set up a limited company a bit more than a year ago.
I was busy with my current day job so did not do much, except for 2 small projects in my freetime, totalling £1000.
I have no employees, and I'm the only director.
I did not register for PAYE as the companyw as pretty much dormat, but what I did is keep 20% of that 1000 for corporation tax, and transferred the 800 to myself as a dividend.

Question 1: I assume this is acceptable, or did I actually have to register for PAYE?
Can the director do some minor work for 0 salary, and get a bit of dividend or not?

Now, there might be two more projects coming, which could in total make around £2000 (in grand total).
I'm now thinking of signing up for PAYE, and paying myself a salary of around £500 monthly for say 3 months.

Question 2: if I do that, do I have to pay myself 500 every month non stop? what if I get no more projects after that? In which case, do I have to make myself redudant and get a P45?
Or is it acceptable to be paid occasionally on PAYE depending on projects?

Question 3: the other option is to pay myself 1500 out of the 2000 as dividend, and again not register for PAYE. But I hope to keep the possibility of other smaller projects open and hence why I think a dividend-only would not be acceptable to the taxman right?

Question 4: What are the deductions that would be deducted from these small projects if I get them, and run PAYE?
I assume (a) company pays salary + employer NI contribution (unless exempt for small salaries?) + corporation tax on profits, (b) employee pays income tax + national insurance.
Should there be pension contributions also by both company and myself?

Question 5: How to best handle PAYE with almost no cost? Quickbooks? Or HMRC's basic tools? I read that accountants can do it for £5 a run?

I feel like this ltd business is a bit too much hassle, and I don't want it to affect my current full time job.

Question 6: I understand that if I'm employed by the ltd company, as a second employment, tax code would be BR (20% straight on all). Now what happens if I change my day job? Would the new job's tax code indicate to their HR that I have another job (i.e. because switching would have happened after I've salaried myself in my limited company?). In which case, perhaps best is to wait on the side projects / limited co, until I've possibly changed the day job?

Thank you