Are you a company director or aspire to be one? What questions do you have for me on the back of watching today's video? 😀. For those who asked previously, here is a link to grab the spreadsheet I used on this video for free - thehumblepenny.com/DVS
Hi boss, thanks for your excellent detailed presentation, however, there was a little error in your presentation regarding the income over £100,000 and the personal allowance. You said "you lose £2 for every £1 over £100,000, infact it's the other way around. For every £2 you earn over £100,000 each year, you lose £1 worth of your £12,570 tax-free personal allowance. Thank you so much once again for your hard work.
thank you please do more on Ltd companies especial how to make yourself more viable for a residential mortgage if you are a ltd company....such what is the best salary, documents you will need to provide etc
I also wanted to know more information regarding this subject, especially if your an employee and wanting to also be a company director. Fantastic video
Thanks Ken. My limited company is my side hustle and not my main business. This video made me realise that I should invest the profit from my limited company in to my pension 🙌
Amazing video and explanation. Could you pls do the same for Profits/retained earnings say £100k? Just wondering how to apply the jump in higher dividend tax rate and the most efficient way to tackle tax . Thanks
Thanks Ken this is fab. I think i watched a similar video of yours before setting up my company in 2022 but now this makes so much more sense after just having my fist tax return submission. There was very little communication with my accountants and i have no idea if they paid NIC contributions or not but i did see my dividends listed as the net profit so now after watching this, i guess not. I do plan to switch accountants to find someone who has the time time speak with me as the others did not and i had to keep chasing them which was quite stressful when you do not know tye process. This video is fantastic so thank you very much
Amazing video and explanation! We're fortunate to have an account that basically did this for us, but good to double check options on here. Well done 👏
Hi Ken, Thank you very much for creating this video in time. It's clearly explained. Can a director pay the salary just above NI LET through PAYE, say £7000 a year? That will be below national minimum wage if calculated hourly. The Payroll software will add the director as employee when inputting the payment details of the director and the director's salary will be treated as employee's, so £7000 wouldn't meet the National Minimum Wage. Many thanks in advance for answering the question.
Thank so much . Am just at the beginning of LTD company journey- Have found these so so useful , thank you. I guess I need to adjust you very helpful .xls to reflect Additional Corporation Tax bands and Divided Tax bands - Hope I don't mess it up - Thanks
Superb video @thehumblepenny! So much useful information and the examples are priceless. Thank you for this. Can i clarify one scenario if you don't mind please....can employees of a limited company (who can be paid a salary) and shareholders (who could be given dividends) be non UK residents? Thank you.
Hello - thanks for the video. I have a full time job where i'm already a higher rate tax payer, say for instance I also have a ltd company that pulls in profits of £50k a year, does this mean i have to pay 25% corp tax + 33.75% tax, this is a tax rate of 60% how does the government expect anyone to get rich and create generational wealth at 60% tax? It's nuts!
Yeah, I know! You'll pay 19% CT rather than 25% if you make £50k profits or below. However, if you draw dividends, yes, you'll pay 33.75% as you're already a higher rate tax payer. It's important to use up as much Pensions allowances as you can and pay yourself as tax efficiently as you can.
@Mark Burke In my personal opinion, the British system is not made for people like you or me to get rich quicker. The only people who can get richer in the UK are the big businesses or established millionaires (such as celebrities on ridiculous pay or CEOs receiving fat bonuses) who find loopholes not to pay high taxes. Most of us can get to a comfortable life at the most by playing the long game of investing towards pension, S&P500 etc. Investing in real estate was a good option but I have read that landlords are now getting shafted by higher taxes on BTL properties. I have always been curious about these random Daily Mail stories about 'single mothers who started their eBay businesses from their garage and now generate a six-figure turnover!'. Wonder how much is their take home salary after paying all these taxes :)
I guess the only thing missing from this is the detail about the combination of what's in your pocket and the amounts left in the company for distribution or the working capital/cash impacts. This is all viewed from the amount into your personal bank account lens but since the company is yours you might want to also look at what remains in the company under each scenario and take the combined values retained. i.e which scenario results in the least cash leaving yours and the companies pocket overall.
Hello ! Another amazing video - I’m still a sole trader but I was just wondering what threshold would you Recommend changing over to LTD? Some say 25k and some say 30k profit- what’s your opinion? Thanks!
Love the content... Brilliant. Regards the company pensions you can get from Vanguard. What am i looking for? I have a full time job and side hustle, the full time job pays well enough to live off so wanted to put all limited liability profits into a pension for me and wife (both directors). Is this a sipp?
Great video, I followed it to the letter, its exactly how I'm going to pay myself as a director of a Ltd co. Do you know where I can find a cheap accountant?
From a Personal bank account into the Business bank account. That amount is treated from an accounting perspective as a loan that you're giving the business, which the business will eventually pay back to you when it becomes profitable.
Hi. As a director of a new limited company, if you already have an existing income stream, can you choose to not pay any salary and put everything into pension and dividends?
Just what I was looking for. Great work. Thanks.2 questions, would be huge help if you could answer please. 1. I and my wife both director and employee, can I claim employment allowance? 2. I have setup company pension with Vanguard, what the transaction should be recorded under? On my freeagent it doesnt consider as business expenses when allocated as Pension Creditor. Thanks
Thanks brother - i know these things buy you made it very clear and sounds professional - More than that is you wish to help others people in good society and enjoy life to fullest. Have a nice day. parminder singh from london
Hi. I have a question about end of tax year self assessments. For this 24-25 tax year I am going to work a combination of both my own limited company (the first time I will have done this) and then for my current employer as a PAYE employee. In April 2025 when it comes to completingself assesments do I have to do one self assesment or will my limited company require it's own seperate self assesment. This is new to me so I'm not so sure. In April 2024 I completed a self assessment but I was just a PAYE employee for the full 23-24 tax year.
Thank you for the video. Still very useful after 11 months. I have a question, what would be the best way of paying myself if I already have a job making £50k + and now also a director of my own company. How does my tax work out? Do you have a video for this type of scenario? Many thanks
Hi Ken, Thanks for making this video. If you are paying NI in a PAYE role and can live off that pay, would it make sense to not pay yourself a salary from your limited company so that you are able to take advantage of the increased annual pension allowance?
Absolutely 💯. If I was in that situation, I would take the tax free dividend amount and then pay myself up to £60,000 a year straight to a pension and invest it.
@@TheHumblePenny Thanks! I have some additional research and worked out that the only reason I was previously advised to pay myself above the LEL from my limited company was because my PAYE role was only going to be a 3-month contract. Now that I intend to do an ongoing PAYE contract, that role has me covered for NI contributions.
What if you only take your pay in the form of dividends with no salary? I have a full time job and just set up my own limited company on the side and my accountant recommended that since I have a full time job I should just take my pay in the form of dividends. What are your thoughts on this?
Hi great video and clear explanation, thank you. However, I think there’s one BIG assumption here and that is that you are making a profit. Maybe a follow up video could highlight the scenario where a Director is paying themselves a salary and dividends based on your suggested rates expecting to make 50K profit and then falls short at the end of the year, then what. This is particularly important to new businesses who may end up breaking even or making a loss. But they’ve been taking dividends.
Very good point. Yes, this assumes you're making a profit. This is why regular bookkeeping is important in order to track Retained Earnings for dividends.
My wife and myself own a property under limited company. We both are employee outside of this company as well. Could our limited company pay just pension only(no director's salary)? Thanks for your work.
Can anybody recommend any online accounting software that you can use to help with running a limited company finances please? I have seen intuit quickbooks advertised a lot. Would that be suitable?
I would love for you to do a comparison between a sole trader doing all this and a limited company. Surely it’s better to be a limited company rather than a sole trader at some point, especially considering you’re outside of IR35?
Does the tax code changes when I take dividends? I mean there is different tax code for those who 2 jobs. I have been working as an employee on PAYE in 1 company and running limited company side by side. I’m not taking any salary from my limited company. I have been taking just the dividends. I have taken dividends only once. I have planned to take another dividend. Will this change the tax code?
A PAYE employee would take home £38,000 after taxes from a £50k salary. Can you discuss more about tax savings and the efficiency of working for yourself through a ltd company. So examples using fuel deductions, phone, etc…. Because based on the calculations you used your £1000 better off working for yourself, not getting sick pay, or holidays. Where as if you used all your tax advantages you would be much better off that 39k from 50k🙃
Hi Ken. Great video as always! Cheeky question, but would you be willing to share the spreadsheet you use for calculating the various income options in this video? This would be a really useful tool! Happy to pay for it if there’s an option on your website?
Nicely explained, i have something to ask about corporation tax, so basically on first year of limited company, the company is expected to make 7k turnover in total, more than half are expenses, so what do you think what’s the best thing to do for me, i mean can i pay myself salary or is it best for first year if as a director I don’t take salary and just have dividend and on the rest amount after expenses i pay the tax on it..
Pension limit of 60000 a year is that person or company that donates into your pension? So if I have two companies can those two companies only put a total of 60000 between them into my pension or can each company put 60000 into my pension?
Hi there, that's a great video and I've been waiting for it since last years video. My tax position this year is that I have two residential properties that are in my own name and for the sake of s24 that I cannot deduct, I earn £14,600pa. Would I be better off paying self-employed ni on anything over 12,570 and then the rest purely as dividends in a separate ltd company. No PAYE and no NI
Very timely. Downloading your spreadsheet seems not available as I plan to send share your video and spreadsheet with my account ant to borrow your idea.
I've been recently offered a job as a contractor which I am very keen to take but also quite fearful of the outcome (might come to bite me in the ass). However, with your help everything makes sense now and a limited company is appealing indeed. Hope you don't mind me asking a few questions regarding the same. 1. How to calculate expenses? (i.e. in detail) 2. Will expenses make a difference at the take home pay? (i.e., positive or negative?) 3. How to calcualte expenses against the take home pay? 4. Can you pay dividends monthly to yourself or is there a risk being audited for taking advantage of the system? 5. Where does IR35 come into play? Should I be worried about it? And, how to check against it? 6. As a limited company director and employee in the UK can you live abroad? (e.g., say I move back to my home country where there is a double taxation exclusion agreement) p.s. I don't expect in-depth answers or anything as I understand some of the above might be hard to explain. Just a top level idea of what to expect and what to look for :)
I would definitely be checking IR35 if you go the limited company route. It’s much easier to not do it through a limited company as you won’t have to worry about that stuff if you are contracting for the same company for a while.
i think this video is concise, however i just need some clarification as i got a bit lost at the end (thats on me not you) my wife is employed by the nhs and has a salary of 11k (part time) She is a silent director on her Nans business and she has just received a dividend ok 10k So does she pay tax of 8.75% on that or the 13% figure you talked about on the scenario slide appreciate any help
Hi Ken, Can you pls do the same for a sole trader, as that is what I am for my side hustle. If I was to transition over to a Ltd company my day job bosses could possibly see this on the internet if you hold a directorship and given my side hustle is also what I do for the day job for them it could be seen as a conflict of interest 🤫🤣 Thank you 🙏🏾
What about those people who already use all of their personal allowance in their main employment, but are starting to to do contractor work too? Can you just pay yourself dividends and no salary if you are outside IR35?
Fantastic video sir, I am a sole trader that just started a limited company today. Im the director and only employee. Seems like my situation is a lil complicated so your advice would be really appreciated. So from start of this tax year till now, I have earned above 12,570 GBP already, and starting from next month, my salary will be paid through my company. So since my income already exceeds the tax efficient salary, should I pay myself one dollar below the state pension benefit 6,396 GBP and the rest in dividends? This way I can keep my income taxes as low as possible, save myself headache on paying NI contributions, and just pay corporate taxes on the actual revenue. But seems like by paying a lower salary I have less salary expense to deduct on taxable income. So what would you recommend?
Since the company can claim the employment allowance of up to 5000, doesn't this mean that on a full salary of 12 570 there will be no employers NIC either?
I have two small companies with my wife, so isn't it better to pay ourselves 9100 from one company and the remainder up the 12570 from the other company? Because then we literally have 0 employers NIC? (While the company paying 9100 gets us the NI stamp)
Guys tell me something if you invest your LTD company's incomes before the end of self assessment date into stocks, private pension or bonds is that legal and if so, is that the right way to avoid paying corporation taxes ? or company still be taxed before doing so?
You get taxed on profits - I.e. income less expenses. However, if you invest your money, you're investing cash (on the balance sheet) not income (on the profit and loss account). Tax is still due on profits if any.
Hi there, thanks for the video. One question: Im getting confused on the salary amount paid as I thought any salary paid below the £12,570 personal tax allowance, can be taken alongside the £1000 dividend allowance as tax fee 0%. So why is CT being calculated for the £3,470 as I thought this could be taken as a tax free dividend? Silly question - apologise!
Are you a company director or aspire to be one? What questions do you have for me on the back of watching today's video? 😀. For those who asked previously, here is a link to grab the spreadsheet I used on this video for free - thehumblepenny.com/DVS
Hi boss, thanks for your excellent detailed presentation, however, there was a little error in your presentation regarding the income over £100,000 and the personal allowance. You said "you lose £2 for every £1 over £100,000, infact it's the other way around. For every £2 you earn over £100,000 each year, you lose £1 worth of your £12,570 tax-free personal allowance. Thank you so much once again for your hard work.
thank you please do more on Ltd companies especial how to make yourself more viable for a residential mortgage if you are a ltd company....such what is the best salary, documents you will need to provide etc
I also wanted to know more information regarding this subject, especially if your an employee and wanting to also be a company director. Fantastic video
Very useful indeed, thank you! I wish my own accountant was so informative 😢
Thanks Ken. My limited company is my side hustle and not my main business. This video made me realise that I should invest the profit from my limited company in to my pension 🙌
Great move 👏🏾
I wish someone had better explained the tax advantages of pension earlier in my career.
Brilliantly explained, thanks so much for this! Stumbled on it when I needed it the most
Awesome! Do share with others :)
Amazing video and explanation. Could you pls do the same for Profits/retained earnings say £100k? Just wondering how to apply the jump in higher dividend tax rate and the most efficient way to tackle tax . Thanks
As a consultant with little overheads/expenses (ie better profit), I'd like to understand this too.
Launching my business shortly and this is very helpful! thank you!
Great! What's problem will your business be solving?
This is the content I love, thanks so much!
😊🙏🏾🙏🏾. Please share with others
I can do this purshase with cash from my bank account business or not or with my card
Really enjoyed this video, you've got a new subscriber.
Awesome, thank you! 😊
Excellent Video Ken very insightful will be sharing!
I appreciate you sharing 😊
This was explained so well. Thank you.
Thank you 😊. I enjoyed making this one
Great content Ken. Compared all the options really well. very informative when planning for the future.
Thanks Ken this is fab. I think i watched a similar video of yours before setting up my company in 2022 but now this makes so much more sense after just having my fist tax return submission. There was very little communication with my accountants and i have no idea if they paid NIC contributions or not but i did see my dividends listed as the net profit so now after watching this, i guess not. I do plan to switch accountants to find someone who has the time time speak with me as the others did not and i had to keep chasing them which was quite stressful when you do not know tye process. This video is fantastic so thank you very much
Amazing video and explanation! We're fortunate to have an account that basically did this for us, but good to double check options on here. Well done 👏
Excellent and well done. Perfect for you to provide that spreadsheet as well. Amazing. I put a couple of questions below many thanks.
You’re doing a great job. Keep the episodes coming
👊🏾
Thanks a lot, Ken. You are loved and appreciated.
Thank you, Denise 😊❤️
Hi Ken, Thank you very much for creating this video in time. It's clearly explained. Can a director pay the salary just above NI LET through PAYE, say £7000 a year? That will be below national minimum wage if calculated hourly. The Payroll software will add the director as employee when inputting the payment details of the director and the director's salary will be treated as employee's, so £7000 wouldn't meet the National Minimum Wage. Many thanks in advance for answering the question.
Thank so much . Am just at the beginning of LTD company journey- Have found these so so useful , thank you. I guess I need to adjust you very helpful .xls to reflect Additional Corporation Tax bands and Divided Tax bands - Hope I don't mess it up - Thanks
Good work, so helpful to go through the numbers.
Glad it was helpful!
Thanks for the video. What advice would you give to someone with a job and property income and the way foward to put the property into a company
Thank you for the video. How can we contact you for your consultation ?
Book a Power Session here: thehumblepenny.com/coaching
This was amazing thank you, I need to watch it again to digest all the info 😅
Great to hear 👍🏾. Do share with others
Superb video @thehumblepenny! So much useful information and the examples are priceless. Thank you for this. Can i clarify one scenario if you don't mind please....can employees of a limited company (who can be paid a salary) and shareholders (who could be given dividends) be non UK residents? Thank you.
Hello - thanks for the video. I have a full time job where i'm already a higher rate tax payer, say for instance I also have a ltd company that pulls in profits of £50k a year, does this mean i have to pay 25% corp tax + 33.75% tax, this is a tax rate of 60% how does the government expect anyone to get rich and create generational wealth at 60% tax? It's nuts!
Yeah, I know!
You'll pay 19% CT rather than 25% if you make £50k profits or below. However, if you draw dividends, yes, you'll pay 33.75% as you're already a higher rate tax payer.
It's important to use up as much Pensions allowances as you can and pay yourself as tax efficiently as you can.
@Mark Burke In my personal opinion, the British system is not made for people like you or me to get rich quicker. The only people who can get richer in the UK are the big businesses or established millionaires (such as celebrities on ridiculous pay or CEOs receiving fat bonuses) who find loopholes not to pay high taxes. Most of us can get to a comfortable life at the most by playing the long game of investing towards pension, S&P500 etc. Investing in real estate was a good option but I have read that landlords are now getting shafted by higher taxes on BTL properties. I have always been curious about these random Daily Mail stories about 'single mothers who started their eBay businesses from their garage and now generate a six-figure turnover!'. Wonder how much is their take home salary after paying all these taxes :)
Really helpful, thank you
And then they wonder why theres so much poverty and start giving your money to other people 😂
That was fantastic, thank you!!
😊🙏🏾🙏🏾
Great video. Thanks for putting this together! :)
Glad you enjoyed it!
I guess the only thing missing from this is the detail about the combination of what's in your pocket and the amounts left in the company for distribution or the working capital/cash impacts. This is all viewed from the amount into your personal bank account lens but since the company is yours you might want to also look at what remains in the company under each scenario and take the combined values retained. i.e which scenario results in the least cash leaving yours and the companies pocket overall.
That was super helpful, thanks
Thank you brother, I found your video very helpful as someone trying to start my first legitimate business.
Much appreciated 🙏🏾
Thanks so much
You're welcome 😊
Hello, I love your presentation and will appreciate insight into having limited company versus umbrella company aside my main job
This is so useful, thank you!
Hello ! Another amazing video - I’m still a sole trader but I was just wondering what threshold would you Recommend changing over to LTD? Some say 25k and some say 30k profit- what’s your opinion? Thanks!
Thank you for this wonderful video. Please do I have to register for PAYE as a director if I want to draw salary from my limited company?
Very helpful video! Thanks!
You're welcome 😊. Do share with others.
Question 🙋🏾♀️… Does it matter how much you pay yourself each month or is it the figures at the end of the tax year that matters.
It's the figure at the end of the year that matters.
Love the content... Brilliant. Regards the company pensions you can get from Vanguard. What am i looking for? I have a full time job and side hustle, the full time job pays well enough to live off so wanted to put all limited liability profits into a pension for me and wife (both directors). Is this a sipp?
Great video, I followed it to the letter, its exactly how I'm going to pay myself as a director of a Ltd co. Do you know where I can find a cheap accountant?
When you open a limited company how does one initially put money into the business?
From a Personal bank account into the Business bank account. That amount is treated from an accounting perspective as a loan that you're giving the business, which the business will eventually pay back to you when it becomes profitable.
Hi.
As a director of a new limited company, if you already have an existing income stream, can you choose to not pay any salary and put everything into pension and dividends?
Yes
@@TheHumblePenny Thanks for the information
Thanks this was really great 👍🏽 🙏🏽
Thanks for watching :)
Just what I was looking for. Great work. Thanks.2 questions, would be huge help if you could answer please. 1. I and my wife both director and employee, can I claim employment allowance? 2. I have setup company pension with Vanguard, what the transaction should be recorded under? On my freeagent it doesnt consider as business expenses when allocated as Pension Creditor. Thanks
Hi, thanks for a great video 😊could you explain the formula you used to get the percentage of PBT as take home pay? (Green Box)
If I open a business but I also keep my job as an employer, can I pay my self just dividend? Or dividend + pension without paying a salary to my self?
Yes.
Thanks brother - i know these things buy you made it very clear and sounds professional - More than that is you wish to help others people in good society and enjoy life to fullest.
Have a nice day.
parminder singh from london
Thank you, Parminder 🙏🏾
Hi. I have a question about end of tax year self assessments. For this 24-25 tax year I am going to work a combination of both my own limited company (the first time I will have done this) and then for my current employer as a PAYE employee. In April 2025 when it comes to completingself assesments do I have to do one self assesment or will my limited company require it's own seperate self assesment. This is new to me so I'm not so sure. In April 2024 I completed a self assessment but I was just a PAYE employee for the full 23-24 tax year.
How do you actually, physically pay yourself a wage or dividends from your company? If you have just started the company where is it drawn from?
Both from your business bank account. Dividends are drawn from retained earnings part of your Balance Sheet.
great video!
Thanks, Savannah 😀. Please share with others.
Thank you for the video. Still very useful after 11 months. I have a question, what would be the best way of paying myself if I already have a job making £50k + and now also a director of my own company. How does my tax work out? Do you have a video for this type of scenario? Many thanks
Hi Ken,
Thanks for making this video. If you are paying NI in a PAYE role and can live off that pay, would it make sense to not pay yourself a salary from your limited company so that you are able to take advantage of the increased annual pension allowance?
Absolutely 💯. If I was in that situation, I would take the tax free dividend amount and then pay myself up to £60,000 a year straight to a pension and invest it.
@@TheHumblePenny Thanks! I have some additional research and worked out that the only reason I was previously advised to pay myself above the LEL from my limited company was because my PAYE role was only going to be a 3-month contract. Now that I intend to do an ongoing PAYE contract, that role has me covered for NI contributions.
@@ellea2541 Great!
What if you only take your pay in the form of dividends with no salary? I have a full time job and just set up my own limited company on the side and my accountant recommended that since I have a full time job I should just take my pay in the form of dividends. What are your thoughts on this?
Hi great video and clear explanation, thank you. However, I think there’s one BIG assumption here and that is that you are making a profit. Maybe a follow up video could highlight the scenario where a Director is paying themselves a salary and dividends based on your suggested rates expecting to make 50K profit and then falls short at the end of the year, then what. This is particularly important to new businesses who may end up breaking even or making a loss. But they’ve been taking dividends.
Very good point. Yes, this assumes you're making a profit. This is why regular bookkeeping is important in order to track Retained Earnings for dividends.
Really helpful, thanks
Glad it was helpful!
Great video. What do you do if you want to earn more than 50k? What are your best options?
My wife and myself own a property under limited company. We both are employee outside of this company as well. Could our limited company pay just pension only(no director's salary)? Thanks for your work.
Absolutely 💯
Can anybody recommend any online accounting software that you can use to help with running a limited company finances please? I have seen intuit quickbooks advertised a lot. Would that be suitable?
Xero
@@TheHumblePenny better than quikbooks?
@@RN-fd5tr Yes. We use it.
I would love for you to do a comparison between a sole trader doing all this and a limited company.
Surely it’s better to be a limited company rather than a sole trader at some point, especially considering you’re outside of IR35?
Love this
Thanks, Ben.
Does the tax code changes when I take dividends? I mean there is different tax code for those who 2 jobs. I have been working as an employee on PAYE in 1 company and running limited company side by side. I’m not taking any salary from my limited company. I have been taking just the dividends. I have taken dividends only once. I have planned to take another dividend. Will this change the tax code?
A PAYE employee would take home £38,000 after taxes from a £50k salary. Can you discuss more about tax savings and the efficiency of working for yourself through a ltd company. So examples using fuel deductions, phone, etc….
Because based on the calculations you used your £1000 better off working for yourself, not getting sick pay, or holidays.
Where as if you used all your tax advantages you would be much better off that 39k from 50k🙃
Hi Ken. Great video as always! Cheeky question, but would you be willing to share the spreadsheet you use for calculating the various income options in this video? This would be a really useful tool! Happy to pay for it if there’s an option on your website?
Hi Andrew, we do share a link in the video to download the spreadsheet :)
@@TheHumblePenny ah amazing! Must have missed that bit. Thank you very much!
Do you also have a spreadsheet for someone whos ltd earn nearly 100k ?
Nicely explained, i have something to ask about corporation tax, so basically on first year of limited company, the company is expected to make 7k turnover in total, more than half are expenses, so what do you think what’s the best thing to do for me, i mean can i pay myself salary or is it best for first year if as a director I don’t take salary and just have dividend and on the rest amount after expenses i pay the tax on it..
Pension limit of 60000 a year is that person or company that donates into your pension? So if I have two companies can those two companies only put a total of 60000 between them into my pension or can each company put 60000 into my pension?
If you have two companies, are you allowed up to £60,000 per year her director company, or is it just £60,000 per year?
Hi there, that's a great video and I've been waiting for it since last years video.
My tax position this year is that I have two residential properties that are in my own name and for the sake of s24 that I cannot deduct, I earn £14,600pa.
Would I be better off paying self-employed ni on anything over 12,570 and then the rest purely as dividends in a separate ltd company.
No PAYE and no NI
I want to know how i can pay myself if i have a contract of just 6 months. How do i apply this approach to it.
Thank you so much 🙏🙏🙏
You're most welcome 😀. Do share with others.
You got any more on sole trader
nice
Thanks !
Very timely. Downloading your spreadsheet seems not available as I plan to send share your video and spreadsheet with my account ant to borrow your idea.
Thank you 😊. Seems odd you can't download the spreadsheet. Nothing has changed on our end. Does it say anything when you try to download?
I've been recently offered a job as a contractor which I am very keen to take but also quite fearful of the outcome (might come to bite me in the ass). However, with your help everything makes sense now and a limited company is appealing indeed.
Hope you don't mind me asking a few questions regarding the same.
1. How to calculate expenses? (i.e. in detail)
2. Will expenses make a difference at the take home pay? (i.e., positive or negative?)
3. How to calcualte expenses against the take home pay?
4. Can you pay dividends monthly to yourself or is there a risk being audited for taking advantage of the system?
5. Where does IR35 come into play? Should I be worried about it? And, how to check against it?
6. As a limited company director and employee in the UK can you live abroad? (e.g., say I move back to my home country where there is a double taxation exclusion agreement)
p.s. I don't expect in-depth answers or anything as I understand some of the above might be hard to explain. Just a top level idea of what to expect and what to look for :)
I would definitely be checking IR35 if you go the limited company route. It’s much easier to not do it through a limited company as you won’t have to worry about that stuff if you are contracting for the same company for a while.
Hi, could you recommend a reasonable accountant, as most charge silly fees, I'm a one man band trader with a ltd company. Thanks
i think this video is concise, however i just need some clarification as i got a bit lost at the end (thats on me not you)
my wife is employed by the nhs and has a salary of 11k (part time)
She is a silent director on her Nans business and she has just received a dividend ok 10k
So does she pay tax of 8.75% on that
or the 13% figure you talked about on the scenario slide
appreciate any help
Hi Ken,
Can you pls do the same for a sole trader, as that is what I am for my side hustle.
If I was to transition over to a Ltd company my day job bosses could possibly see this on the internet if you hold a directorship and given my side hustle is also what I do for the day job for them it could be seen as a conflict of interest 🤫🤣
Thank you 🙏🏾
Noted ✅️
I hear you 😉
What about those people who already use all of their personal allowance in their main employment, but are starting to to do contractor work too? Can you just pay yourself dividends and no salary if you are outside IR35?
Fantastic video sir, I am a sole trader that just started a limited company today. Im the director and only employee.
Seems like my situation is a lil complicated so your advice would be really appreciated.
So from start of this tax year till now, I have earned above 12,570 GBP already, and starting from next month, my salary will be paid through my company. So since my income already exceeds the tax efficient salary, should I pay myself one dollar below the state pension benefit 6,396 GBP and the rest in dividends? This way I can keep my income taxes as low as possible, save myself headache on paying NI contributions, and just pay corporate taxes on the actual revenue. But seems like by paying a lower salary I have less salary expense to deduct on taxable income. So what would you recommend?
Since the company can claim the employment allowance of up to 5000, doesn't this mean that on a full salary of 12 570 there will be no employers NIC either?
I have two small companies with my wife, so isn't it better to pay ourselves 9100 from one company and the remainder up the 12570 from the other company? Because then we literally have 0 employers NIC? (While the company paying 9100 gets us the NI stamp)
Is there any opportunity to pay interest on loan accounts?
Best thing to do if your business is online is go live in Dubai for a minimum of 3 years and pay zero tax
It pays off
Why is corporation tax and dividend tax better than income tax and NI? Nowadays there's not a fat lot of difference.
The spreadsheet doesn’t work if I put numbers greater than 50k to test the waters unfortunately
Guys tell me something if you invest your LTD company's incomes before the end of self assessment date into stocks, private pension or bonds is that legal and if so, is that the right way to avoid paying corporation taxes ? or company still be taxed before doing so?
You get taxed on profits - I.e. income less expenses. However, if you invest your money, you're investing cash (on the balance sheet) not income (on the profit and loss account). Tax is still due on profits if any.
Hi there, thanks for the video. One question: Im getting confused on the salary amount paid as I thought any salary paid below the £12,570 personal tax allowance, can be taken alongside the £1000 dividend allowance as tax fee 0%. So why is CT being calculated for the £3,470 as I thought this could be taken as a tax free dividend? Silly question - apologise!
I thought the same.
And no answer yet😢
Do you offer accounting services
Unfortunately, not. I offer Coaching though. Learn more here: thehumblepenny.com/Coaching
You're a God send. Just as taxes need to be done.
You're welcome! Do share with others 😀
Thank you very much!
You're most welcome 🙏🏾. Share with others
Do you also have a spreadsheet for someone whos ltd earn nearly 100k ?