Limited Company Questions

Teekaylon

Hello
i wonder if someone can just take the time to quickly breakdown the costs regarding overheads for a small limited company, i mean as far as the goverment is concerned?

i.e corporation tax 20%, PAYE self assesment etc... from start to finish what comes from my profits to the goverment?.... i am a small limited company working on my own, no VAT..

i know corporation tax and PAYE self assesment are seperately treated.. i.e i know one is the business and one is me, but what are they all of them? lol... a brief overview of limited company costs i guess...

so i pay 20% corp tax then get my £11000 personal allowance and PAYE and NICS above that? isnt that a whole lot of tax? or am i missing something?

Thanks for the help in advance

Dazed_and_confused

What did your accountant say?

Dazed_and_confused

a) salary (a cost to the company): if this is less than £8,164 then there is no income tax or NI to pay but state benefits still accrue.


Is this actually true?

lovinituk

Dazed_and_confused wrote: »

a) salary (a cost to the company): if this is less than £8,164 then there is no income tax or NI to pay but state benefits still accrue.


Is this actually true?

Yes...

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

Section 1.2 where it mentions LEL and PT.

p00hsticks

Dazed_and_confused wrote: »

a) salary (a cost to the company): if this is less than £8,164 then there is no income tax or NI to pay but state benefits still accrue.


Is this actually true?

my understanding;
It's true that there is no income tax or NI to pay.
It's true that state benefits still accrue PROVIDING that the salary is above the Lower Earning s Limit (5,876 a year for 2017-18)

Dazed_and_confused

The quote was that if salary is less than £8164 no NIC is payable but state benefits still accrue.

If this is true why do directors often pay themselves £8000+ and not just, say £4000?? and have bigger dividends?

Post crossed with others clarifying things thanks

lovinituk

Dazed_and_confused wrote: »

The quote was that if salary is less than £8164 no NIC is payable but state benefits still accrue.

If this is true why do directors often pay themselves £8000+ and not just, say £4000?? and have bigger dividends?

Post crossed with others clarifying things thanks

Because you can earn up to £11000 tax free and only pay a tiny amount of NI. Then divi's on top. Wages can be paid more regularly (weekly, monthly), dividends are supposed to be less regular. Dividends can only be paid out of company net profit whereas wages are an expense regardless of profit.

As of this year, paying divi's larger than £5k now attract a 7.5% tax over the £5k and up to the higher rate tax limit.

uknick

Employer NI allowance no longer allowed for single director/employee companies;


https://www.gov.uk/claim-employment-allowance


came in April 2016.