Salary / Dividend split but director has previous 11/12 earnings
Could I ask you community members for the benefit of your intelligence on this please
I've just taken on a new client who's just formed a limited company but was until a couple of weeks ago an employee (HR taxpayer).
Thinking about the Salary / Dividend split, I'm taking him onto his company payroll with monthly salary at rate just under the NIC primary threshold. My rational is that Nic's are charged on each payment and he's paid a regular monthly salary, therefore the strategy of monthly pay with only a very small amount eligible for secondary contributions and none eligible for primary would work would'nt it ?
I have got this right hav'nt I ? Just want to be sure that his earnings from previous employment will not impact on.
The rest would be paid dividend. He'll have used up his personal allowance for the remainder of this year but at least we'll have established a salary for next tax year.
Your comments would be greatly appreciated.
Ps would you agree that its best to pay up to the primary threshold ?
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