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Hi All,

Just set up as a limited company and have a meeting with my accountant on Tuesday but just trying to work out the NI payed by the employer (me)

In a nut shell I have full time job with amazing hours paying me £36k a year. These hours have enabled me to set up my own limited electrical company. Now to make it easy I want to pay myself £1000 a Month meaning a total salary from both jobs of £48k which is under the 40% tax band.

This is my understanding - as a director I have to pay 20% tax on what I pay myself and 12% NI. I’m also reading I have pay employers NI of 13.8%. Obviously from my main job I go above the NI threshold so I have to pay NI. If the above is true I’d have deductions of 46% meaning I’d have to pay myself roughly £1900 to get my desired £1000. That’s outrageous if true.

Can anyone in a similar position confirm

Thank you
 
You don't have to pay yourself £1000 in wages from your limited company, you can instead pay some of your remuneration as dividends (divided according to shareholders, e.g. if your partner was a 49% shareholder, they'd get 49% of the dividends). You are still going to pay tax, but can save some NI.
 
It's not outrageous, it's a fact of life if true.

You wouldn't be paying yourself £1900 to get £1000, you'd be in to higher rate tax, you'd have to pay yourself even more than that.
Once your over the higher rate tax band as an employee you'd have even higher total deductions than 46%.

Stop guessing and wait till you see your accountant.
 
I’m sure this forum is for advice and general guidance. If I were guessing I wouldn’t use an accountant I’d just wing it. I’m just trying to half understand it before Tuesday so I have an idea of what he’s talking about. Nothing wrong with preparing yourself. But thanks for the useless advice snowhead
 
The less you pay yourself, the less tax, NI and Employer’s NI you would have to pay.
Of course, if you paid your self as a subcontractor, you wouldn’t have to pay Employer’s NI at all.
 
Yes it is. It is illegal for anyone to work as a subcontractor whilst actually working as a PAYE employee.
No it’s not.
Lots of people have more than one job.
Just because they are employed and paid PAYE at one job, doesn’t make it illegal for them to work as a subcontractor and be paid CIS at another job.
 
Odd response and I’ve edited it for your

Maybe try getting free advice from an accountants forum ?

Well actually Iv posted it in the buisness section and last time I checked this is buisness related. If you don’t have an answer dont post on it Cheer for your advice to
 
From the HMRC website:

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:
  • they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
  • they can decide what work they do and when, where or how to do it
  • they can hire someone else to do the work
  • they’re responsible for fixing any unsatisfactory work in their own time
  • their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
  • they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
  • they can work for more than one client
 
From the HMRC website:

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:
  • they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
  • they can decide what work they do and when, where or how to do it
  • they can hire someone else to do the work
  • they’re responsible for fixing any unsatisfactory work in their own time
  • their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
  • they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
  • they can work for more than one client

You are really making yourself look silly. I honestly think you are just trolling.
 
Well actually Iv posted it in the buisness section and last time I checked this is buisness related. If you don’t have an answer dont post on it Cheer for your advice to

Matey - that is a HUGE difference between sparks sharing advice on running a business and giving or taking VERY SPECIFIC advice about HMRC taxes .

So I suggest you listen to your accountant.
 
You are really making yourself look silly. I honestly think you are just trolling.
The problem here, is you.
You have no idea what you are talking about.
Whereas I have experience of doing exactly as I have suggested.

When I had my Ltd. Co. I paid myself as a subcontractor.
I used the figures supplied to me on the payment advice from whichever agency I was being paid by.
At the end of the year, I got the PAYE/CIS people to send me a form to offset the tax owed by the tax deducted by the agencies.

Only bugbears being: having to send a form off every month to CIS informing them I was employing myself, and the fact that Corporation tax and Companies House tax years start at the beginning of the month, rather than on the 6th of April.
 
Yes it is. It is illegal for anyone to work as a subcontractor whilst actually working as a PAYE employee.
That can't be correct can it?
I know plenty of people who have a full time paye job plus another job that they do on a self employed basis.
As long as it's declared on their tax return what's the problem?
If true then that makes a lot of firemen law breakers.
 

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