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Optimum salary for 2012/13

Optimum for 2010/11 £589

Can anyone confirm this increases to £624 wef 6/4/12?

Just checking before letters go out!


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Not 100% sure

As I have seen the figure as £7,488 and £7,485 per annum so could be £624 or £623.75 per month.

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15th Mar 2012 11:37

2010/11 optimal was £602

In my view the optimal 2010-11 salary was £602 per month.

This results in a salary per director of 7,224 and employers' NI per director is £20.98 compared to 7,068 and zero for the £589.

But the 7,224 and 20.98 are allowable for corporation tax.  Assuming 20% CT this results in a lower CT bill by 34.60.  Small beans of 13.62 I suppose.

602 has been my default and clients were informed why this was so back in Jan, at which point 10% opted for the 589.  But month 12 payslips have just gone out, so it will be interesting to see how many decide they can do without the hassle of the 20.98.



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Payroll costs?

I trust you don't charge them more than £20.98 per annum to work the net pay and the directors don't mind sending the payment off on time etc etc.?


2012/13 - HMRC site says £7,488 ... so £624. I love the LibDEms ... if only they knew they had increased the basic pay of so many company directors (and accountants) by 31% in 2 years!!

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Class 1 NIC payment hassle

Although your sums add up, we felt that having to pay the Class 1 NIC payments was more hassle than the £13 savings you refer to.

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Only more hassle for single-employeedirector companies...

JCresswellTax wrote:

Although your sums add up, we felt that having to pay the Class 1 NIC payments was more hassle than the £13 savings you refer to.


That partly depends on whether or not the director is the only employee. If the company employs other people then the extra effort for the directors NI payment to HMRC is zero and the £13 saving a pure bonus.

And for a director/spouse combination for example the benefit doubles and the effort remains the same. If you operate directors NI calculations (or indeed a single annual payment) even in a one man company that is 3 quarterly nil notifications and 1 payment in April.

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By blok
15th Mar 2012 12:08


I like round sum figures and for 11/12 always advised £7k.  Its easy for me to remember.

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16th Mar 2012 13:11


Just to be clear, I have offered all clients the choice with 602 being the default position.  40% have other employees so it's a no-brainer.  10% have gone for the 589.  The other 40% either have not read my notes on this properly - in which case I'll get some grief in the next 3 weeks or so! - or have read them and have gone for the 602.

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