Employers NI...Sole Director

looknohands

I'm a sole director of a LTD, with no permanent employees, I hire contractors on a regular basis. The business is growing but turnover is under £100k, profit last year £60k, so still interested in saving a bit of money where we can.

I'm a bit stumped by the new employers NI rules, I had intended this year to pay myself a salary of £20k to cover living costs, then draw dividends at the end of the year when we actually know how much profit we had...

However sole directors are no longer eligible for the relief on employer NI, and I have been paying employers NI, which I hadn't considered before. As it stands for this year I'm just about at the mark where this all kicks in (£9k) and have paid £800 in employers NI, so have stopped in my tracks a bit and spoken to my accountant.

He has said I can just take quarterly dividends from now to save on this as we'll then be only just over the NI threshold for PAYE, (£8060?), so i'll owe £122 in employers NI, and then the dividends aren't liable for employers NI...

He's also suggested paying my OH £10k + £20k for myself, we would then be eligible for the employers allowance in full, this seems like an option as my OH does occasional work, but I pay her as a contractor.

Are there any other ways around this that people have used?
Just to note the Employers NI is £1,600 per year, so it's not huge.. but I'm a bit of a penny pincher and would rather see that go on something that will allow the company to grow a bit more.

Pennywise

Your accountant has told you the ways to avoid it. Either pay yourself a small salary £8k p.a. and then dividends, OR, employ your OH so there's two of you on the payroll.