How do people live off £622 a month plus tax dividends quarterly???

[Jeystone]

I believe the only way to avoid personal tax and only pay 20% corporate is to take a salary of £622 a month, and take the rest in dividends...ok great..so how do I pay my rent which is £700 a month?

My accountant is now saying I must setup PAYE (since I live in a reality where I need around £1500 a month), and I will have to pay further personal tax on this..

I'm sure some of you out there are far more experienced than I and can offer some advice on how not to get r*ped by HMRC

Kind Regards

[Clare@InTouch]

You can pay monthly salary of whatever you like, although you will need PAYE set up if it's above a certain amount. Dividends can then be paid monthly, no need to wait and do it quarterly.

If you're looking to avoid any PAYE on your salary then go for £589 a month - this gives you enough to cover your state pension without resulting in tax & NI (depending on your tax code and prior income).

[malvolio]

I believe the only way to avoid personal tax and only pay 20% corporate is to take a salary of £622 a month, and take the rest in dividends...ok great..so how do I pay my rent which is £700 a month?

My accountant is now saying I must setup PAYE (since I live in a reality where I need around £1500 a month), and I will have to pay further personal tax on this..

I'm sure some of you out there are far more experienced than I and can offer some advice on how not to get r*ped by HMRC

Kind Regards

The usual technique is to take the money you need out of the company bank account as salary and dividends. The really clever bit is to time it so that there is enough money in your personal account to pay the bills when needed. Or put three months worth in htere and only spend it one month at a time. I beleive it's called "budgetting".

Or you could take dividends more frequently if you really want to. As long as the company's supporting paperwork is straight, they won't get marked as salary by HMRC.

And you're not avoiding personal tax, you're avoiding NICs. But you knew that, of course.

HTH

[MrRobin]

I'm not sure I understand the question...? If you're going to take dividends quarterly, then it's only hard to make ends meet for the first 3 months. After that you should have enough to keep you going for the following 3 months...

I take dividends annually... I know how much I will spend and it lasts all year.

[malvolio]

I take dividends annually... I know how much I will spend and it lasts all year.

I wish I could get that organised financially...

It's like plumber's taps always dripping. I can manage a £25m P&L and bring it in to perfection, but can I plan a year's income at home? Can I heck...

[northernladuk]

I wish I could get that organised financially...

It's like plumber's taps always dripping. I can manage a £25m P&L and bring it in to perfection, but can I plan a year's income at home? Can I heck...

LOL, same. The numbers probably say yes... head just can't get around it

[Jeystone]

The usual technique is to take the money you need out of the company bank account as salary and dividends. The really clever bit is to time it so that there is enough money in your personal account to pay the bills when needed. Or put three months worth in htere and only spend it one month at a time. I beleive it's called "budgetting".

Or you could take dividends more frequently if you really want to. As long as the company's supporting paperwork is straight, they won't get marked as salary by HMRC.

And you're not avoiding personal tax, you're avoiding NICs. But you knew that, of course.

HTH

ok great so why is my accountant insisting that dividends are taken quarterly?

[Clare@InTouch]

ok great so why is my accountant insisting that dividends are taken quarterly?

Maybe it makes his life easier, but it's not up to him. You're the director, you can declare a dividend at any time you want.

[Support Monkey]

no idea why they are saying quarterly I take dividends every month, never had any issue

[Wanderer]

ok great so why is my accountant insisting that dividends are taken quarterly?

Because they don't want to do more paperwork than they have to.

You can declare a dividend every time you raise an invoice if you like - you don't even have to wait till the invoice is paid (so long as you know it will be paid). You are the director of the company, not your accountant.