Discuss Paying yourself through a Ltd as a subby in the Business Related area at ElectriciansForums.net

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Payment on account is for Company Directors PAYE.
We are not PAYE.
We are equal company directors we do 95% sub contract labour where 20% is taken by CIS the jobs we do we keep back 20% for corparation tax
our corparation tax bill is offset against expencises etc so far we have overpaid and get a BACS payment back.
our personal "wages" is made up of dirctors fee and dividends.
After our personal allowance we now pay personal tax on dividends
This for us is now have to be paid now on account so the HMRC have the money before we have made it.
Hope this makes sense.
 
We are not PAYE.
We are equal company directors we do 95% sub contract labour where 20% is taken by CIS the jobs we do we keep back 20% for corparation tax
our corparation tax bill is offset against expencises etc so far we have overpaid and get a BACS payment back.
our personal "wages" is made up of dirctors fee and dividends.
After our personal allowance we now pay personal tax on dividends
This for us is now have to be paid now on account so the HMRC have the money before we have made it.
Hope this makes sense.

If you are taking a dividend and not a wage at all then that would be illegal and you would probably want to seek advice and delete all the messages in which you have admitted to that.
 
If you are taking a dividend and not a wage at all then that would be illegal and you would probably want to seek advice and delete all the messages in which you have admitted to that.
This comment is complete and utter tosh!
 
If you are taking a dividend and not a wage at all then that would be illegal and you would probably want to seek advice and delete all the messages in which you have admitted to that.
what we take each week is made up of directors fee and dividend.
I have tried to explain the best way I can sorry I'm not an accountant.
 
Also known as a wage?????

Are you for real?
Essex I have posted that I am not an accountant and have tried to explain on here the best way that I can if you think that you can explain better than me please go ahead as I now feel that you are just trying to find fault with what I am trying to say.
 
Essex I have posted that I am not an accountant and have tried to explain on here the best way that I can if you think that you can explain better than me please go ahead as I now feel that you are just trying to find fault with what I am trying to say.

As a Company Director you are an employee of the company. As such you will be paid a wage each month. Usually this is in line with the NMW. This income will be PAYE income and you will pay tax as per the tax set at the time.

After you have paid yourself then dividends can be paid if the company is in profit but if you work 50 hours a week then you should be paying yourself 50 hours a week at NMW level.

What you call a 'Directors Fee' is your PAYE wage that you will pay employers NIC, employees NIC and personal income tax on just like any other PAYE employee.
 
Essex I have posted that I am not an accountant and have tried to explain on here the best way that I can if you think that you can explain better than me please go ahead as I now feel that you are just trying to find fault with what I am trying to say.

Also I am sorry if I came across rude. As the Company Director it is vital that you understand how these things work. 'I am not an accountant' does not wash with HMRC. Ultimately you will be liable, not your accountants.
 
We are aware of our liabilities. " I am not an accountant " was in reference to me being able to explain the ins and outs of tax law and regulations.
 
I am the director of a limited company and do not take a monthly wage or directors fees, in fact nothing at all! I also work for the company. Please enlighten me where it says in legislation I cannot along with other company directors be paid a dividend if one is issued. Also are you sure that directors are not exempt from NMW legislation unless contracted!?
 
I am the director of a limited company and do not take a monthly wage or directors fees, in fact nothing at all! I also work for the company. Please enlighten me where it says in legislation I cannot along with other company directors be paid a dividend if one is issued. Also are you sure that directors are not exempt from NMW legislation unless contracted!?

It is really very simple. I take it you then take a 'Directors loan' when you need it then?

Assuming so your accountant will then work out at the end of the tax year how much to declare as PAYE and how much to declare as dividends.

'Silent' Directors that have no involvement in the day to day running of the business are exempt from the NMW. I am a Managing Director and therefor am not exempt.

There is an argument that if a Director is also on the tools then they are not actively a working Director so exempt from the NMW. However they would then need to be paid as an electrician and that then means NMW is applicable so no better off.

If you are taking 100% of your wage as dividends then this is 100% tax evasion and illegal. You are also breaking NMW laws unless you are not involved in the day to day running of the company.
 
Again you have stated very strong views which are your own interpretation of tax laws. The NMW legislation is quite clear and doesn’t mention managing or silent directors or those ‘on the tools!’ it clearly only mentions those subject of a contract. No contract as a director NMW simply does not apply!
 
I don't want to muddy the waters but are you sure a contact has to be explicit? When i was looking at employment law for sometime who was working without a contract for a dodgy company, it appeared that a deemed concontr was automatically formed, and if the statement of employment was not provided in writing then the court would decide the terms of the contract.
Obviously that was relating to actually working for an unrelated company, but I'd be surprised if there was no equivalent here.

AsAa different topic this minimum wage thing seems risky t me as well, you'd be lucky to find an electrician happy to work for minimum wage so even then one day the hmrc might start challenging the rates of pay when working for your own company.
 

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