Hello,
I set up a limited company a bit more than a year ago.
I was busy with my current day job so did not do much, except for 2 small projects in my freetime, totalling £1000.
I have no employees, and I'm the only director.
I did not register for PAYE as the companyw as pretty much dormat, but what I did is keep 20% of that 1000 for corporation tax, and transferred the 800 to myself as a dividend.
Question 1: I assume this is acceptable, or did I actually have to register for PAYE?
Can the director do some minor work for 0 salary, and get a bit of dividend or not?
Now, there might be two more projects coming, which could in total make around £2000 (in grand total).
I'm now thinking of signing up for PAYE, and paying myself a salary of around £500 monthly for say 3 months.
Question 2: if I do that, do I have to pay myself 500 every month non stop? what if I get no more projects after that? In which case, do I have to make myself redudant and get a P45?
Or is it acceptable to be paid occasionally on PAYE depending on projects?
Question 3: the other option is to pay myself 1500 out of the 2000 as dividend, and again not register for PAYE. But I hope to keep the possibility of other smaller projects open and hence why I think a dividend-only would not be acceptable to the taxman right?
Question 4: What are the deductions that would be deducted from these small projects if I get them, and run PAYE?
I assume (a) company pays salary + employer NI contribution (unless exempt for small salaries?) + corporation tax on profits, (b) employee pays income tax + national insurance.
Should there be pension contributions also by both company and myself?
Question 5: How to best handle PAYE with almost no cost? Quickbooks? Or HMRC's basic tools? I read that accountants can do it for £5 a run?
I feel like this ltd business is a bit too much hassle, and I don't want it to affect my current full time job.
Question 6: I understand that if I'm employed by the ltd company, as a second employment, tax code would be BR (20% straight on all). Now what happens if I change my day job? Would the new job's tax code indicate to their HR that I have another job (i.e. because switching would have happened after I've salaried myself in my limited company?). In which case, perhaps best is to wait on the side projects / limited co, until I've possibly changed the day job?
Thank you
I set up a limited company a bit more than a year ago.
I was busy with my current day job so did not do much, except for 2 small projects in my freetime, totalling £1000.
I have no employees, and I'm the only director.
I did not register for PAYE as the companyw as pretty much dormat, but what I did is keep 20% of that 1000 for corporation tax, and transferred the 800 to myself as a dividend.
Question 1: I assume this is acceptable, or did I actually have to register for PAYE?
Can the director do some minor work for 0 salary, and get a bit of dividend or not?
Now, there might be two more projects coming, which could in total make around £2000 (in grand total).
I'm now thinking of signing up for PAYE, and paying myself a salary of around £500 monthly for say 3 months.
Question 2: if I do that, do I have to pay myself 500 every month non stop? what if I get no more projects after that? In which case, do I have to make myself redudant and get a P45?
Or is it acceptable to be paid occasionally on PAYE depending on projects?
Question 3: the other option is to pay myself 1500 out of the 2000 as dividend, and again not register for PAYE. But I hope to keep the possibility of other smaller projects open and hence why I think a dividend-only would not be acceptable to the taxman right?
Question 4: What are the deductions that would be deducted from these small projects if I get them, and run PAYE?
I assume (a) company pays salary + employer NI contribution (unless exempt for small salaries?) + corporation tax on profits, (b) employee pays income tax + national insurance.
Should there be pension contributions also by both company and myself?
Question 5: How to best handle PAYE with almost no cost? Quickbooks? Or HMRC's basic tools? I read that accountants can do it for £5 a run?
I feel like this ltd business is a bit too much hassle, and I don't want it to affect my current full time job.
Question 6: I understand that if I'm employed by the ltd company, as a second employment, tax code would be BR (20% straight on all). Now what happens if I change my day job? Would the new job's tax code indicate to their HR that I have another job (i.e. because switching would have happened after I've salaried myself in my limited company?). In which case, perhaps best is to wait on the side projects / limited co, until I've possibly changed the day job?
Thank you
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