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Directors Salary with £19000 part time job

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Hi!

So I have a part time job which pays me around £19000 a year. I have just set up a limited company doing agency work which I estimate will bring in around £2500-£3000 per month.

My accountant has advised that I take a directors salary of £758 per month from this. I understand that I need to register as an employer and there's a significant amount of work to be done each month to generate a payslip. 

My question is, will it be worth the hassle? Or I can pay my accountant around £20 per month to do it for me. Or shall I just take the cash out as dividends and pay the dividend tax on this

Thanks in advance!

Replies (22)

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By David Ex
28th Apr 2022 10:13

Definitely do what your accountant advises.

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Caroline
By accountantccole
28th Apr 2022 10:25

You pay your accountant for a reason, if you don't trust their advice, find a new one you do trust.

Based on the very brief info here, his conclusion does not sound unreasonable, he can explain the maths and savings possible so you can compare to the costs

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Replying to accountantccole:
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By nichsrose
28th Apr 2022 10:39

Thank you. I was only asking on here as I am brand new to the business/ accounting/ tax world and just wanted to seek a second opinion to help me understand what I am doing.

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Replying to nichsrose:
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By Tax Dragon
28th Apr 2022 11:08

It's amazing how many posters here want a second opinion when they don't understand the opinion they've already been provided with.

Why is two opinions you don't understand better than one?

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Replying to Tax Dragon:
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By nichsrose
28th Apr 2022 11:47

I appreciate what I'm asking is very basic, but if what you're going to say isn't going to assist or educate me then why not just scroll past and not waste your time and effort on replying.

Also, as I stated in the question, she has given me the option of either doing the work myself or paying her to do it. This is the advice I was looking for.

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Replying to nichsrose:
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By Tax Dragon
28th Apr 2022 12:06

nichsrose wrote:

if what you're going to say isn't going to assist or educate me...

You want me to teach you something? Look up Segal's law.

My view? Pay the £20 a month, get it right. (That's just my view, mind.)

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Replying to Tax Dragon:
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By Paul Crowley
28th Apr 2022 14:22

I had never heard or it, the law that is
But I think it is true that 5 accountants, given the same records, would give 5 different profit figures

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Replying to Paul Crowley:
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By Tax Dragon
28th Apr 2022 14:29

That's known as The Crowley Corollary.

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Replying to nichsrose:
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By David Ex
28th Apr 2022 11:18

nichsrose wrote:

Thank you. I was only asking on here as I am brand new to the business/ accounting/ tax world and just wanted to seek a second opinion to help me understand what I am doing.

Ask the person you are paying to “help you understand”. Any half decent accountant should be making sure you understand in the first place.

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Replying to David Ex:
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By nichsrose
28th Apr 2022 11:47

This is the first time in my life I have had to use an accountant, so I thought double checking what she is saying is a sensible thing to do instead of blindly going forwards on her advice with no idea what I'm doing. Surely, seeing if other more knowledgable people in the field agree then that gives me a greater evidence base.

Also, as I stated in the question, she has given me the option of either doing the work myself or paying her to do it. This is the advice I was looking for.

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Replying to nichsrose:
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By David Ex
28th Apr 2022 11:57

nichsrose wrote:

Also, as I stated in the question, she has given me the option of either doing the work myself or paying her to do it. This is the advice I was looking for.

So you’re asking a load of people who you don’t know and who don’t know you (and your tax and accounting capabilities) whether your personal preference is to do some work yourself. Have I got that right?

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Replying to nichsrose:
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By Hugo Fair
28th Apr 2022 11:58

"Surely, seeing if other more knowledgable people in the field agree then that gives me a greater evidence base."

1. You've no idea (nor does anyone) whether advice you receive on a public forum is from people more knowledgeable than your appointed accountant.
2. You may end up with a larger (but not necessarily greater) evidence base - but to what purpose?
3. You are quite entitled to seek 2nd opinions, but it may not be worth your while to do so (and as per above) you may end up less clear as to what is 'correct'.
For instance, you can take the same approach to anything (medical diagnosis, car maintenance, choice of partner, etc) ... but often just end up more confused.

FWIW, you ask about "the option of either doing the work myself or paying her to do it" ... and my answer is pay her - if only for the simple reason that, in your own words, you're new to all this and don't know how to do it all correctly.
If in the future you think you could get someone else to do a better or cheaper job (or even 'have a bash' yourself), then at least you'll be starting from a clean base.

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By MCV71
28th Apr 2022 11:21

Why do many people needlessly start sentences with "So," these days?

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Replying to MCV71:
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By nichsrose
28th Apr 2022 11:38

Thank you for your assistance.

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Replying to nichsrose:
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By MCV71
28th Apr 2022 14:21

You're welcome.

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Replying to MCV71:
the sea otter
By memyself-eye
28th Apr 2022 17:46

I blame Father Dougal:
"So, then Ted"......

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Replying to memyself-eye:
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By MCV71
28th Apr 2022 21:11

:-) Though more likely the dumbing down Americanisation of our language. Notice how many also interject sentences with "like," and an upward intonation at the end of each sentence.

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Replying to MCV71:
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By Hugo Fair
28th Apr 2022 23:03

So this style you not like? (with apologies to Yoda).

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Replying to MCV71:
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By D V Fields
28th Apr 2022 23:46

I wish there was a law against it. You just want to reply “So?” to them.

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By Paul Crowley
28th Apr 2022 12:04

If the question is really:
Is the wages fee reasonable? then yes it is
I would really not want someone trying to get wages done themselves unless they have done it recently and buy good software, with a working support helpline

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By Leywood
28th Apr 2022 15:09

Ive said it before, but I will say it again, if you want a second opion - PAY FOR IT!!!!!

This is not a free advice forum for business owners.

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Replying to Leywood:
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By David Ex
28th Apr 2022 16:02

Leywood wrote:

Ive said it before, but I will say it again, if you want a second opion - PAY FOR IT!!!!!

This is not a free advice forum for business owners.

Bizarre, isn’t it?!

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