latest salary thoughts

[ratewhore]

So I am back to contracting after a few years permie with a startup (fun and frustrating in equal measure).

Obviously there have been a few changes in respect of IR35, HMRC etc. I'm on top of it but I am interested to know what is the perceived wisdom in terms of salary these days?

It is still £10K salary high dividends, or a reasonable salary eating into the profits? I have a reviewed IR35 compliant contract, confirmation of working practices, own kit, my office as a defined workplace yada yada yada.

Good to be back..!

[PerfectStorm]

It's still salary to £10,600 - in conjunction with the NI small company allowance, and dividends of 31785 gross (27546 net)

Some lesser accountancy firms recommend a circa £8k salary I believe, not making use of the NI allowance.

This all changes in April whereby a small amount of tax (couple of grand or so) will be necessary per year to hold back in order to achieve a figure similar to the above.

[northernladuk]

Yadda yadda And got an accountant?

[ratewhore]

Yadda yadda And got an accountant?

Getting a new one actually. I have a good track record with accountants, Darren Upton was my accountant many moons ago!!

[DaveB]

It's still salary to £10,600 - in conjunction with the NI small company allowance, and dividends of 31785 gross (27546 net)

Some lesser accountancy firms recommend a circa £8k salary I believe, not making use of the NI allowance.

This all changes in April whereby a small amount of tax (couple of grand or so) will be necessary per year to hold back in order to achieve a figure similar to the above.

NI Allowance for one man bands is going in April.

Also arriving in April is a 7% lower tax rate on Dividends after the first £5000. Rises to net 25% if you go into the upper tax bracket.

[MrMarkyMark]

Darren Upton was my accountant many moons ago!!

You're lucky you are setting up another limited vs. being knee deep in lube, in a 6 by 6 foot cell, waiting for a "visit".

[chopper]

Yadda yadda And got an accountant?

Particularly when it comes to salary/divi split, different accountants have different views of what to do for the best and so this isn't a particularly bad question to put to a forum (even if it has been asked many times) to see what other people are doing.

Just because your accountant says "yeah, do X" it doesn't mean that's the right way to do it, it could just mean that accountant is being conservative with his recommendations.

Heck, some 'accountants' recommend schemes where you keep 89% of your earnings. It doesn't mean that advice is right and a bit of sanity checking with ones peers doesn't go amiss.

[WordIsBond]

Why does no one ever ask the basic question like whether the OP has any other income?

Are you just back NOW after permie during the first part of the tax year? If so, you probably shouldn't be paying yourself any salary, since you've already used your personal allowance.

[ratewhore]

Why does no one ever ask the basic question like whether the OP has any other income?

Are you just back NOW after permie during the first part of the tax year? If so, you probably shouldn't be paying yourself any salary, since you've already used your personal allowance.

Sorry yes I should have been clear. I am looking at drawing a salary from the start of the new tax year. Drew low salary for many years so it looks like there is no major reason to change from what I am used to.

Thanks all...