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Tax Free Bonus

Minimum Salary and year end Tax Free Bonus

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I have a Client who insists he can pay himself the minimum salary on PAYE through his Limited Company and then draw a Tax Free £50K bonus at the Year End. I think he is in wishfull thinking land and, possibly getting confused with Director's Loans ( although even these are not Tax Free ). Any one know of such a sceme ? If so, we can all join it.

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By lionofludesch
13th Feb 2020 18:35

He's an idiot, I'm afraid.

He may be thinking of being able to draw a dividend up to the higher rate threshold but all that ended when Dividend Tax was invented.

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panda ketteringUK
By ketteringUK
13th Feb 2020 19:03

sounds like your client gained a knowledge when having a pint in a pub with a mate...

looks like one to disengage, too much troubles ahead. unlikely to recommend you to others. i call it a dead weight.

i always get irritated when client is trying to correct my knowledge, doubt my advice or trying to dispute my professional integrity and experience.

and as far as tax-free lumps - i came across compensation for loss of office or redundancy pay for single co directors before but the amounts were nothing like £50K.

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By SXGuy
14th Feb 2020 06:30

Ask him to take two and we can split the 2nd between us.

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