Friend setting up a Ltd company at the start of the 13/14 tax year.
He is 55, retiring at the end of January 2013 with a final salary pension of circa £23k pa. His wife is still working and earns circa £25k pa staff and will keep on working for a good few years.
So neither of them has any tax free allowance to use up and will be directors of this consultancy.
They could both pay themselves up to the secondary threshold to avoid paying NI on this Ltd Company salary but as they will both be paying 20% paye and probably 40% on dividends is there any reason to do this rather than just do dividends. They both have more than a living wage from outwith the company.
Would HMRC prefer to see some wages going through or are they just as happy with dividends.
Turnover of company will be £30k o£40k to keep him out of the way of the buses working in the oil and gas industry. I reckon the turnover could easily reach £70k.
He is 55, retiring at the end of January 2013 with a final salary pension of circa £23k pa. His wife is still working and earns circa £25k pa staff and will keep on working for a good few years.
So neither of them has any tax free allowance to use up and will be directors of this consultancy.
They could both pay themselves up to the secondary threshold to avoid paying NI on this Ltd Company salary but as they will both be paying 20% paye and probably 40% on dividends is there any reason to do this rather than just do dividends. They both have more than a living wage from outwith the company.
Would HMRC prefer to see some wages going through or are they just as happy with dividends.
Turnover of company will be £30k o£40k to keep him out of the way of the buses working in the oil and gas industry. I reckon the turnover could easily reach £70k.
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