How to Pay Yourself as a LTD Company in 2021 | Dividends or Salary? Directors Account

Рет қаралды 12,157

Күн бұрын

To work with me head to www.jsmtax.com
In this video I go more in-depth on my previous video about paying yourself as a LTD Company. I go through salary, dividends and generally tell you the best way to pay yourself as the Director. I go through some examples, depending on where your business is at to ensure you have an understanding of the process!
The most tax efficient mix in the 2021 tax year is a mixture of salary and dividends, the best salary is around 797 per month in order to avoid national insurance, amounts over this will usually be better taken a dividend.
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Пікірлер: 50

@joediangelo5265 3 жыл бұрын

killing it bro. this is my new faorite channel.

@SuperOneandonly1 3 жыл бұрын

This is top quality content Josh, thanks for sharing!

@thefomemister 3 жыл бұрын

Great content thanks for the update!

@andywall2401 Жыл бұрын

Thank you for a clear and concise explanation 🎉

@Chris-sx4qw 2 жыл бұрын

Awesome channel Joshua 👏👏👏

@Ben-gb2xg 3 жыл бұрын

Great content Joshua as always.

@JoshuaTharby 3 жыл бұрын

Glad you enjoyed it

@srkaccommodationltd9242 3 жыл бұрын

Wow, love watching your video's Josh. I learn something new each time. Thank you :)

@JoshuaTharby 3 жыл бұрын

Glad you like them!

@Chris-sx4qw 2 жыл бұрын

Absolutely a brilliant channel

@Patchpartners 3 жыл бұрын

Such great tips 👏🏽

@JoshuaTharby 3 жыл бұрын

Thank you!!

@bushramohammed4156 3 жыл бұрын

Very useful information, thank you Joshua.

@JoshuaTharby 3 жыл бұрын

Glad you found it useful.

@Ben-gb2xg 3 жыл бұрын

Great video mate

@JoshuaTharby 3 жыл бұрын

Thanks 👍

@RachelleReign 3 жыл бұрын

Great video! I do actually have close to a 200k DLA so very relevant for me 😁

@jasonpatterson365 3 жыл бұрын

Very useful information!

@JoshuaTharby 3 жыл бұрын

Glad it was helpful!

@ReverbProductions 3 жыл бұрын

Thanks this was very informative

@JoshuaTharby 3 жыл бұрын

No problem, glad it helped, more knowledge and advice to come!

@ajc_rypto2696 3 жыл бұрын

Hi Josh, great vid. Can you make a vid that is specific to higher/additional rate tax payers and their Ltd Co property business is a much smaller percentage of their total income?

@sarahboult4867 3 жыл бұрын

Great video, looking forward to a call with you, I have a few questions!

@ryancollins7347 Жыл бұрын

Hi Joshua, love this strategy, but the digging I have done would suggest that on DL interest the max PSA is £5K assuming personal income

@thesamnorris 3 жыл бұрын

This is a fantastic video Josh. The salary and dividend part at the end was the highlight for me. Can I ask a quick question. Myself and my business partner have our own ltd companies, which each owns a 50% in our business. Each month we transfer funds from our business to each of the limited companies. Should we be paying corporation tax on the business profits before, or net of that money being taken?

@JoshuaTharby 3 жыл бұрын

Hi Sam, you'll need to account for the 19% corporation tax you will have to pay at the end of the year when calculating how much can be paid to the holding company in dividends.

@philipr2712 10 ай бұрын

Joshua.. interesting concept and l likenthe presentation. Surely this applies to you if a resident.. What if your only here for 90 days of the year, residing elsewhere??

@wosby_limited 6 ай бұрын

Hi Joshua. Great stuff. Question: Based on the above, if you had 50k for example to put into a business, would you put it in as Owner Contribution or as a loan to your company?

@DarrynAlmeida 3 жыл бұрын

Is the interest classed as income when calculating what your revised student loan repayment would be? And if your company hasn't made enough of a profit to pay interest at the decided rate, would you pay the tax on it under self assessment interest anyway for that year and subsequently take the interest tax free as and when it was available in the company?

@surfinit313 3 жыл бұрын

Please could you make a video on the most tax efficient thing to do if you are a higher tax payer with your business as a second income

@THEG12EG 3 жыл бұрын

Live on expenses

@freespiritkaro3414 3 жыл бұрын

Thanks Josh - does that mean that one needs to have a minimum 200k cash sitting in the company to Open a DLA and pay themselves interest ? Or this is not a rule of thumb but any Number below that just isn’t tax-efficient ?

@kayhallinan3598 3 жыл бұрын

Thanks for the video, lots to think about 😊 quick question, if you charge your company interest on the directors loan, you save 19% corporation tax, but do you then have to pay 20% income tax on it? (Assuming lower rate tax payer) or is there a tax free interest earnings amount available?

@JoshuaTharby 3 жыл бұрын

This is covered about 10 minutes into the video :)

@willbrooksy 3 жыл бұрын

Hi Josh - Great stuff - I follow you on FB also! 2 things - - Is that apple's latest iPad your writing on :) - I have followed your advice and sent some money to my company with an industry standard interest rate. However, my current accountants have advised me to set the interest rate at 0-1% to "avoid a accounting nightmare" and went onto explain that the company would need to without 20% tax to pay HMRC every quarter using the CT61 form. Does this make sense or have i got my wires crossed? Note: We dont need to take any money out the company for ~5 years as we still work but do plan to 'harvest' where tax efficient.

@JoshuaTharby 3 жыл бұрын

Hi Will, it sounds like you need to change accountants and join JSM Partners, book a call here if you want to chat to me and get more information. www.bit.ly/callwithjosh. I look forward to speaking to you Will.

@maharous 3 жыл бұрын

Hi Josh, Thank you for the great video. I had a question about the salary amount in the 60K example. As you are charging salary of 9568 which is the Primary Threshold for NI but above the Secondary Threshold of 8840, won’t you then need need to pay the 13.80% Tax of Employer contribution? If yes, are we better of to pay ourselves salary of 8840?

@JoshuaTharby 3 жыл бұрын

Hi Maharous, thank you for the comment, No, because you will be getting employment allowance.

@Jeffybonbon Ай бұрын

Intresting watching this and how things have changed I would not be surprised if Labour make dividend tax the same a Income tax that would mean a basic rate Director would be paying around 40% tax to with draw dividends higher rate taax payer would pay a lot more too

@evanwilliamson3602 Жыл бұрын

Am I correct in saying that the remaining £1,500 that you only pay 20% tax on is from the initial £20,000 from the directors loan? Im aware Corporation tax has increased

@anitabradbury6115 3 жыл бұрын

Thanks Josh What happens if I have not set my PAYE up and I am coming up to year end. Can I set up and pay myself the full amount in M12? There is no loan account as I started trading with payment for a contract and have taken no money so far. TIA

@JoshuaTharby 3 жыл бұрын

It depends on specifics with the company and situation, best option would be to chat to your accountant

@acpatsalides 3 жыл бұрын

If you take more of a salary my understanding is that yes you are paying more income tax, but it’s deductible against business income bringing down the profits it the Ltd company and therefore less corporation tax at 19%. Rather then in your plan of 19% Corp + 7.5% income tax on dividends I also think people are thinking bigger in terms of income expectation. I think you should run a simulation with an extra zero at 600,000k of income/ corporate profits Good info if you only make 60k :p

@JoshuaTharby 3 жыл бұрын

The trouble with that is any higher salary will result in the company paying employers national insurance at 13.8%, the employee paying national insurance at 12%, and also the income tax. This extra NI out weights the tax saving here. I will run a few more simulations in a future video!

@let7794 3 жыл бұрын

Am I right say 3 people put DLA 250k total in spv ltd, for a 450k house . Rental income is 20k a year. Charge 10% interest at 20k and 5k via ct61. 20k income minus 25k interest expense means no tax as 5k loss? but then 3 people have to do self assessment and as we have payee jobs we will be pushed into 40% tax, So we would pay 40% of 7k (derived by 25k interest divide by 3 people minus 5k x 3 people room before we hit 50k minus 1k x3 interest allowance ) is 2.8k tax? Plus 3x self assessments and company accounts. Compared to 19% corporation tax on 20k income is just under 4k?

@let7794 3 жыл бұрын

So in my case best to charge 0 interest and just stick with corporation tax