How to manage the money in the Company in periods of inactivity ?

[2uk]

I am having next contract working for another IT company. What should I do with the money in my Company during the 3 months I am not brining any money in. ?

1. Should I draw the accumulated dividend and not pay myself PAYE during these 3 months ? аBout 5k - , the rest of the money is corp tax money .

2. Tax wise , Should I keep paying my self – PAYE salary of 900 although no money will be coming in ? However, If I draw the 5 k in dividends , I will be paying my salary from tax money !

[VectraMan]

You should keep paying your salary, as long as you can. After all, it's a salary. But as you're operating at a loss, you shouldn't really be paying dividends at all.

Don't spend the tax money.

[2uk]

You should keep paying your salary, as long as you can. After all, it's a salary. But as you're operating at a loss, you shouldn't really be paying dividends at all.

Don't spend the tax money.

Does this mean paying 900 monthly salary is always most tax efficiant regardless you are high/low tax payer ?

[malvolio]

Does this mean paying 900 monthly salary is always most tax efficiant regardless you are high/low tax payer ?

I think you need an accountant. These are basics...

For example, the point of low salary/high divis is that you keep out of higher rate as long as possible. Or hadn't you twigged how that works yet?

[2uk]

I think you need an accountant. These are basics...

For example, the point of low salary/high divis is that you keep out of higher rate as long as possible. Or hadn't you twigged how that works yet?

I trust no one but CUK

[malvolio]

I trust no one but CUK

There speaks a brave man. Foolish and misguided, but brave...

[2uk]

There speaks a brave man. Foolish and misguided, but brave...

Believe me , here you can get very good advice , be it "Ask your accountant" , which I normally do , but is awesome to have a second opinion.

[pisces]

Maybe start a new company for the new contract and close the current one?

[dude69]

You should keep paying your salary, as long as you can. After all, it's a salary. But as you're operating at a loss, you shouldn't really be paying dividends at all.

He can still pay out retained income from previous periods.

I would continue to pay out £5k salary, £30k/yr dividends, even if the company was not earning any income, up to the point there was no money left in the company.

[malvolio]

He can still pay out retained income from previous periods.

I would continue to pay out £5k salary, £30k/yr dividends, even if the company was not earning any income, up to the point there was no money left in the company.

Not quite - up to the point when any retained profits have been exhausted for dividend payments, and as long as you can afford it for salary. Don't forget a director has a legal duty not to trade an insolvent company, so you have to leave sufficient working capital for the usual bills and stuff like CT and VAT payments