I have a client who works for an employer under PAYE he has been with the employer for 10 years and uses his tax free allowance in this employment, he is in the process of setting up a limited company where he has designed a tool to help in his trade. The first year is going to result in a loss, he is going to continue working for his employer in the same way as he always has.
when the company begins to make a profit, does he have to pay himself a small salary through PAYE or can he just pay himself in dividends. It would be more tax efficient for him to pay himself in dividends if the rate of corporation tax is reducing to 19%.
Thanks in advance.