Director pay

Nervsmomma2022

Hi, can someone explain how i can take my pay once i become director and shareholder at 45 or 50k per year

uknick

Simple answer is;

your company pays you through their PAYE system or,
you take it all as dividends or,
a combination of both which is the usual practice.

The more complicated answer will take into account how much tax you want to pay verses how much you want to take from the company to live on.

I assume from your question you haven't yet hired an accountant.  It might be a good investment as not only will they help you with VAT, annual accounts and tax returns etc. they can also advise you on tax efficient ways of getting your money out of the company.

 

Veteransaver

"Normal" practice if it's your own company is to pay yourself up to the personal allowance, Eg £12,700 ish a year

Then take the remainder as dividends. However the annual dividend allowance has been hugely reduced in last few years, dividends it used to be effectively tax free up to the high rate threshold, but you now get taxed at above £2500 I think.
But think it is still generally more advantageous than doing it all on PAYE, as you and your company save NI however as you say you won't be in the higher tax bracket ( if earnings are below £50k) it may not be a great saving.
But you would probably want to engage an accountant, especially if you've just set up the limited company.
There's a lot of paperwork involved, like annual returns, filing corporation tax, you'll automatically have to do a self assessment tax return, plus you'd need to register the company for PAYe and do it monthly.etc, produce company accounts and dividend vouchers etc.