Question on taxcodes - I have numerous clients who run their own small Ltd company and pay themselves a low salary £7,072 with the remainder of their drawings by way of a dividend.
Last year one of the directors opted to have the income tax on his dividend paid via his taxcode for 2012/13. This has led to an updated taxcode which doesnt provide the full tax free allowance.
My question is do I have to use this updated taxcode for the director? If I do, then essentially I will have to operate a payroll for the company and pay over to HMRC a certain % of income tax each month.....this means from a client handling point of view it becomes more involved and makes the client less desirable.
Is there any way around it? Essentially it will all fall out in his 2012/13 tax return anyway....