Limited Company tax check

horseymchorseface

Just wanted to double check things:

Opened company in Oct 2017

Have 16k in business account from earnings

Have spouse who is a secretary

The accountant has suggested the following:
Payroll Figures


Take Home Net

Option 1

Salary £2,680.00

NO NI/income tax to pay

Option 2

Salary : £8,060.00

No income tax to pay

Total NI tax to pay ( Employee/employer)£1,155.46



Option 3

Salary: £11,500.00

No income tax to pay

Total NI tax to pay ( Employee/employer):£2,016.56

Do these figures look right, as I understood that I can have 8060 a year without paying both Employers and employee NI tax.

They mentioned as the spouse is secretary of the company and hence does not have cumulative allowance for the company that is the reason for the high NI tax.

The spouse does not have any other job.

Thanks for the advice

csgohan4

that's a bit on the high side, using the uk tax calculators available, you only need to pay about 800 pounds combined NI for the full personal allowance amount.


I think the issue is the cumulative allowances and non cumulative allowance which I suspect the spouse is on the latter.


Is there a way to change them to cumulative allowances?

NineDeuce

I bet the spouse isnt the best person for the job....

badmemory

Surely the idea is to take enough to get credited with NI contributions without actually paying for them. That also leaves enough personal allowance for the spouse to transfer to you to reduce the tax you pay (unless of course your earnings are too high.

I am obviously missing something that those more knowledgable than me will soon be along to deal with. Although this is a very very busy time for them as we get closer to 31 Jan.

[Deleted User]

badmemory wrote: »

Surely the idea is to take enough to get credited with NI contributions without actually paying for them. That also leaves enough personal allowance for the spouse to transfer to you to reduce the tax you pay (unless of course your earnings are too high.
.

Can’t disagree with any of that.

TheCyclingProgrammer

Have you had any other earnings in the tax year?

£8060 is the right amount to qualify for NI credit without paying any.

Is there any reason you can’t make your spouse a director and benefit from the same NI calculations? You’d also qualify for the employer NIC allowance if necessary.

I’d also argue that your spouse being a director (and having the same legal responsibilities as such) would make it easier to justify paying her an £8k salary versus her just being a company secretary, unless she is doing other work for the company to justify her salary?

chrismac1

You've hired an accountant, so any duff advice is potentially a claim against his or her PII cover.

Yet apparently you prefer random advice from punters on here against whom you have no comeback whatsoever if it goes wrong.

I don't get that.