Second Income

ReaperALM

Hi,

This might be in the completely wrong place so I apologise if this is the case - new user here.

Basically I am in a decent position at work at the moment and my income is as follows:

Gross Monthly Pay - £2600

Gross Commission/Bonus Average - £1500-£2500 (dependant on sales per month etc)

I pay into the Nest pension scheme each month etc.  I don't have any benefit in kind taxes etc.

I've spotted a gap in the current market during this pandemic and have a genuine business plan with a company already set up but just lying dormant.  The current figures I've worked based on a contract that lasts for 4-6 months.  The GP in those months would be approx £720,000. 

Here's the question, as a director of that company, I look to pay the 19% corporation tax and then I was looking at pulling the money out in the best way possible, is it advisable to take out as a dividend or pay a wage from that company?  How would this affect my current 'bread and butter' pay and tax code etc.

The numbers involved are mind boggling and quite close to becoming reality - I need to get my ducks in a row.

Any help is greatly appreciated.

Regards

Garyh79

If you have just thought up a company with annual revenue over £1m you should probably get an accountant to help you.

ReaperALM

Garyh79 said:

If you have just thought up a company with annual revenue over £1m you should probably get an accountant to help you.

I do plan to do this next week but was hoping for some advice beforehand as it’s driving me nuts not being able to do anything about it over the bank holiday.

[Deleted User]

well you could pay yourself a wage, but that is going to cost you 40% tax or more, plus NI etc
you can pay yourself £2k per year dividends tax free, but only after CT has been paid n that amount. then you are likely going to be paying 30-40% tax on your dividends too.

David10K

You're best leaving the money in the business until your first income decreases below the 40% tax band. Then you can start drawing a salary/dividends otherwise you will be paying a great deal of tax.
It sounds like it would be worth leaving your current job to focus on your second income.