So previously I worked as a contractor and had an (awful) umbrella company running my accounts. I have since launched my own business as a Ltd company and want to understand as much as possible about the best and accepted methods of accounting/finance.
I am currently still working full time as an Employee of a large corporation thus am paying PAYE/NI/Pension into that company. With that in mind, is it acceptable to just pay myself through MY Ltd company via dividends, as I am still paying everything else in the meantime, thus I am already using my tax allowance.
I just wondered what peoples thoughts may be on this?
On face of it yes just dividends will do but you need to check on IR35 if you are working for same employer via ltd company
Ok, Thank you for your reply.
My Ltd company and the company I am an employee for are completely separate so luckily I don’t think I need to worry about IR35.
Are you able to recommended any sources where I can read up about Ltd company accounts, I just want to make sure I get everything correct so I can have a clear cut year end, I’ve got 10 months to go still, so its early days but I’m eager to learn as much as possible before getting an accountant.
Typical IR35 situation is contractors working as employee form a company and start invoicing same employer. You can google on IR35
As far company accounts its lot of stuff to read, chuck of it might not apply to you. Best is do you book on QF and engage year end service as you wont need payroll for now unless things change. One thing to look for is dividends amount you can take out of the company, illegal dividends and over drawn director account have consequences with tax authorities. You can use free dividends calculator on my website for getting an idea how much dividends can be taken using figures from QF for a period
Ok thanks, Thats brilliant.
Have a great day
I agree that you don’t need payroll at the moment but dividends may have personal tax obligation dependent on how much you earn via PAYE so you may want to read this:
I hope this helps.