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Having a full time PAYE job and a LTD company

I'd like to know the best way to withdraw money from the company.

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I have a full time job employed PAYE and I am paid just over the higher rate threshold. I also have a LTD Company which I use for weekend work. The company doesn't turnover a lot of money, roughly 8k a year. 

My question is, other than the 2k dividend I can withdraw each year, how much can I withdraw from the company each month without registering as an employer and will I be taxed 40% and have to pay NI contributions on that?

I realise with the low turnover it would make more sense to invoice as a sole trader but almost no-one in the broadcast industry will employ a sole trader these days. 

 

 

 

 

 

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15th Apr 2019 12:51

You can draw a salary and pay 40% tax on it. If you're claiming Child Benefit, you may have to pay some back. Hard to say on the vague details you post.

If you draw less than £8500 as a salary, you won't need to pay NI. But if you draw more than £6000ish (forgotten what the exact number is for this year), you will need to register for RTI.

The alternative is draw a bigger dividend but that's probably not going to be so good - you'd have to look at the numbers.

Oh - and beware those IR35 issues.

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By eight0
15th Apr 2019 13:23

Thanks for your reply lionofludesch, Don't mean to be vague, if there is any more info I could provide that would make it easier to reply let me know.

Some more details that might help:

Company expenses are minimal, home office, travel 2 or 3 times a month, that's about it.

I'm not claiming any benefits.

So is that 6000ish inclusive of the dividend or separate? Does that have to be spread out monthly as a set salary or can I withdraw all that at once? Apologies if these are stupid questions, I'm new to all this.

I do work for a couple of companies rather than just one so hopefully the IR35 thing won't be an issue.

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to eight0
15th Apr 2019 13:43

Sounds like you need an accountant.

You can draw your salary as you wish but, if you don't have a 31 March year end, you'll need to ensure that the right amounts fall in the right accounting year and the right tax year.

The salary doesn't include the dividend.

It's complicated. If you're a higher rate taxpayer you CAN afford that accountant, who'll give you the advice tailored to your situation.

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15th Apr 2019 14:00

Quite often on this forum, I'm sure we come across as self-promoters.
However, what Lion's offering, is sensible and very logical advice, which you would be well advised to take.

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By jcace
15th Apr 2019 14:19

If you pay yourself any salary through your company, you will need to register as an employer, setup a PAYE scheme and operate PAYE, as you have another employment and will therefore need to deduct tax from all salary payments through your company.

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By eight0
15th Apr 2019 14:48

Thanks for your responses, much appreciated. I will look into getting an accountant I think.

@Jcace are you saying that because I'm over the lower earnings limit in another employment, to pay myself a directors salary I would have to register my company as an employer?
I had been told that as long as I didn't withdraw more than the LEL I wouldn't have to.

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to eight0
15th Apr 2019 15:07

Adam Hayto wrote:

Thanks for your responses, much appreciated. I will look into getting an accountant I think.

@Jcace are you saying that because I'm over the lower earnings limit in another employment, to pay myself a directors salary I would have to register my company as an employer?
I had been told that as long as I didn't withdraw more than the LEL I wouldn't have to.

That would be true if you didn't have any other income.

But as you'll be deducting 40% tax, you'll need to report that.

A great example of carp advice from the bloke in the pub.

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to eight0
15th Apr 2019 15:08

There is no de minimis limit at which you don't need to register for a PAYE scheme.

If none of your employees earn over the LEL AND none of them have another job, a scheme is not required, in your case, clearly, you have another job and so the scheme is required for any level of salary.

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to Duggimon
15th Apr 2019 15:13

Duggimon wrote:

There is no de minimis limit at which you don't need to register for a PAYE scheme.

If none of your employees earn over the LEL AND none of them have another job, a scheme is not required, in your case, clearly, you have another job and so the scheme is required for any level of salary.

Gosh, duggimon, that's clear as mud. One minute you say there's no de minimis, the next you say there is.

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to lionofludesch
15th Apr 2019 15:47

You're quite right! Probably why you're in the running for tax adviser of the year!

I should have stressed the "you" in the first sentence. For the OP, there is no de minimis, if he pays himself a salary, he's got to operate PAYE.

There is a de minimis, as he was advised, if he didn't have another job. But he does.

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to eight0
15th Apr 2019 15:08

Adam Hayto wrote:

I had been told that as long as I didn't withdraw more than the LEL I wouldn't have to.

You can't believe everything you're told.

Except in this forum, of course.

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By eight0
15th Apr 2019 15:49

Thanks again for the responses everyone it's been very helpful.

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15th Apr 2019 16:42

Couldn't he put his money into a pension?

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to brian-scholar
15th Apr 2019 16:53

Happen he could - but suddenly we're treading on the toes of investment advice.

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16th Apr 2019 09:15

I'm seeing the word 'payed' more and more frequently, almost to the point I'm starting to doubt myself that it's not a word.

Has anyone else noticed this increasingly creeping into daily language?

I'm not claiming to be a grammar expert, as my vocabulary sucks, but this one just baffles me.

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By eight0
to craig__2k4
16th Apr 2019 09:31

craig__2k4 wrote:

I'm seeing the word 'payed' more and more frequently, almost to the point I'm starting to doubt myself that it's not a word.

Has anyone else noticed this increasingly creeping into daily language?

I'm not claiming to be a grammar expert, as my vocabulary sucks, but this one just baffles me.

Corrected! Weirdly a quick google shows it can be spelled either way these days, but I agree payed should only be used for 'payed a debt' rather than 'I was payed'

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to eight0
16th Apr 2019 10:11

Adam Hayto wrote:

Corrected! Weirdly a quick google shows it can be spelled either way these days, but I agree payed should only be used for 'payed a debt' rather than 'I was payed'

"Payed" and "paid" are both valid words but are not alternatives to one another.

https://writingexplained.org/payed-or-paid-difference

Try a slow google.

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to eight0
16th Apr 2019 10:36

Adam Hayto wrote:

Corrected! Weirdly a quick google shows it can be spelled either way these days, but I agree payed should only be used for 'payed a debt' rather than 'I was payed'

That was too quick a google, "payed" is always wrong unless you're talking about ropes.

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to craig__2k4
16th Apr 2019 09:41

I'd read it as "PAYEd".

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to Tax Dragon
16th Apr 2019 10:00

Maybe that's the way forward? If someone says they were payed, we are to presume it was via PAYE, thus saving time.

Marginal gains and all that.

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