THE 'BEST' SALARY TO PAY YOURSELF FROM YOUR BUSINESS (LIMITED COMPANY) 23/24 EDITION

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THE 'BEST' SALARY TO PAY YOURSELF FROM YOUR BUSINESS (LIMITED COMPANY) 23/24 EDITION

Рет қаралды 8,153

Күн бұрын

Dan covers the most tax efficient salary to pay yourself as a director of a limited. Paying yourself the ’right’ way as a small business owner is very important in order not to cost yourself money.
In this video, Dan get’s straight to the point of what levels of salary most people will pay.
Topics include:
The most tax efficient (optimal) director’s salary for 2023/2024
How to pay yourself from your limited company (UK)
Director’s salary
Employers Allowance
Employers National Insurance
Dividend tax rates
Income tax rates
Salary vs Dividend
Corporation tax
… and more!
If you have any questions or thoughts on this, please comment below.
Other useful videos:
Why paying salary in important • WHY YOU NEED TO PAY YO...
Dividends vs Salary • DIVIDEND VS SALARY EXP...
Pay guides • Limited Company Pay Gu...
Subscribe to our Podcast on Spotify and Apple: “The HeelanHub Podcast” - a show for small business owners.
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Call: 02392 240040 Email: info@heelanassociates.co.uk
#accounting #smallbusinessuk #tax
Note: As always, these videos are educational and should not be considered financial advice.

Пікірлер: 37

@Battersea_Bathrooms 9 ай бұрын

Thanks, I can't wait for another online drop-in session. It would also be great to learn about employing vs. hiring subcontractors.

@HeelanAssociates 9 ай бұрын

Hey good to bump into you here 😃 The bookkeeping one is every month for free as a client. If you have any direct questions on employee vs subbie the team here can defo help with that one.

@geoffcarlton4047 9 ай бұрын

I'm surprised you didn't mention Employment Allowance, get your partner on the books and save the whole NI bill. Probably a video in itself, good info as usual though 👍

@HeelanAssociates 9 ай бұрын

Yup a very common strat in the right circumstances. Didn’t want the vid to go too long or too deep. This one needs an update kzfaq.info/get/bejne/bNWapqSIurXPj30.html

@foxabilo 5 ай бұрын

I thought you also needed at least 1 non director employee to qualify?

@geoffcarlton4047 5 ай бұрын

@@foxabilo I hope not 🤔

@geoffcarlton4047 5 ай бұрын

@@foxabilo I hope not 🤔

@geoffcarlton4047 5 ай бұрын

@foxabilo nah, both the rules need to be apply to not be eligible... 1) only one employee paid above class 1 NI. 2) the employee is also a director of the company

@LeaderofRussiadhbfsdfbs Ай бұрын

This is great, thanks. Do you have a link to a spreadsheet though that compares the different amounts payables at different incomes? I’d love to see that if you do

@HeelanAssociates Ай бұрын

As accountants we obviously do these calcs, but sadly not something we have available to share.

@lukegadd3209 Ай бұрын

Hi, I'm currently going through the transition of sole trader to limited company. Should have done it so much sooner but so much involved it can be a little daunting to begin with. Your videos have been so helpful in getting my head around everything and can't believe how much I've learnt just from your videos l. So thank you. I have a quick question on transferring assets and can't seem to find the answer anywhere online. We supply and install kitchens and bathrooms as well as a great deal of other interior works and so looking to transfer over our equipment and tool (of which there's a great deal and some pretty new and expensive) I was looking at doing this transaction via a directors loan account. The Answer I can't seem to get anywhere is how to allow for depreciation of these tools? Is it as simple as researching the secondhand market value via ebay etc.? Or is there a rule of thumb or allowance involved? Hope you can help.. thanks in advance

@HeelanAssociates Ай бұрын

Glad you found the videos useful! This one is difficult to answer here as there are a few ways of doing it, and there are tax consequences to what you might do. If you do what you are suggesting, usual practice would be estimate of market value using as you say, ebay or similar for comparable pricing.

@avc-38371 9 ай бұрын

Thank you! What I never understand is that by setting a low salary and taking dividends that appears as low when you apply for credit, loans or tenancy contracts?

@HeelanAssociates 9 ай бұрын

Your tax return proves the income. So when you go for a mortgage they ask for various docs proving your income as a whole.

@aimableniyogakiza 9 ай бұрын

Thanks 🎉

@HeelanAssociates 9 ай бұрын

No prob :)

@dopareel 8 ай бұрын

Thanks, is it tax free to have been given/gifted money through one personal account to another?

@HeelanAssociates 8 ай бұрын

Sort of. It’s a tricky question to answer as In some cases yes, in some cases no. In some cases yes but there is a form to make it no. Sorry it’s a bit vague but it’s difficult to simply state an answer to that!

@milesking6245 6 ай бұрын

Hi Dan - great video as ever. You dont mention Directors pensions as part of this, particularly as Company contributions to Directors pensions are expensed. Do you know what HMRC would deem an 'over-contirbution' if I take £12.57k as salary and total contribution is under £60k for tax relief? 1. Is it related to my PAYE salary level (i.e. £12.57) or 2. declared taxable profit (e.g. £20k to Pension by Co if >£20k profit taxable) or 3. just the £60k total contibution? Surely I cannot reduce my Co taxable profit to zero each year by boosting Director Pension Company Contributions by corresponding amount?

@esemredemir 6 ай бұрын

You can google all of this to learn but let me tell you as a company director :) You can contribute max £12.57k You can reduce profit to zero, every year. Why not? Do you have to so profit, is there such a rule? Lets say your profit would be 120k if no salary and contribution. You could pay yourself 60k gross salary and 60k pension contributions. Both of them expense to company so no profit :)

@milesking6245 6 ай бұрын

Thanks for your reply. My question is about the relativity of Company Pension contribution to PAYE salary...does this matter to HMRC? Second is the relativity of Company Pension contribution to Corp Taxable profit...does this matter to HMRC. As an example, if I generate £102.75k as a business and take £12.75k as PAYE salary, and £60k as Company Pension contribution, leaving £30k as Taxable Profit (from which I need to pay dividends to live on) - is that OK by HMRC?@@esemredemir

@milesking6245 6 ай бұрын

Many thanks for your reply. My question is really about what HMRC permit as company contributions before 'over-contribution'. For example: If my company generates £102.57k, I take £12.57k as PAYE salary, and I need £30k of taxable profit (to pay dividends), can I expense £60k as a company contribution to a directors pension?@@esemredemir

@HeelanAssociates 5 ай бұрын

Esemre You could but that’s unlikely to be the most tax efficient result taking into account National insurance.

@HeelanAssociates 5 ай бұрын

Miles probably too much to cover here. I left that out the video because it’s a separate issue really. You can reduce your profits to zero. It’s more about whether the contribution is tax deductible and you can read hmrc detailed view here in their manual www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46035

@jaynezhang 8 ай бұрын

Very helpful 👍👍

@HeelanAssociates 8 ай бұрын

Glad you think so!

@patomlinson4865 7 ай бұрын

Hi. Wonderful insights. Question. please. I have taken early retirement I Very much interested in building my wealth.Can I take my lump sum state pension from HMRC to. Fund my LLC or S Corporation to purchase property. ?

@CeriAnnwen 6 ай бұрын

Your pension will come monthly I'm pretty sure but you can fund your llc with that!

@HeelanAssociates 6 ай бұрын

It’s usually possible that you could make a loan from yourself (say from your pension cash you’ve received) to your limited company, and the company purchase property.

@aimableniyogakiza 9 ай бұрын

Does those salaries still apply on higher income earners?

@HeelanAssociates 9 ай бұрын

It depends on what other ‘paye’ income you have. If you are already higher rate due to other income often you don’t process any salary, but it’s very dependent on circumstance and goals.

@paulcyrel6678 Ай бұрын

Hi I’ve set up ltd company in my name and painting myself monthly into my personnel account - will child Maintanence take from my ltd company ? I can’t get answers ?

@HeelanAssociates Ай бұрын

Normally this would only happen if you were running a payroll for your salary and were instructed to deduct it from your wages.

@patelankita 9 ай бұрын

If director paid annually around £5000 as wages. Required to register for PAYE?

@olliec1319 9 ай бұрын

Yes

@HeelanAssociates 9 ай бұрын

It’s one of those were hmrc confuse the issue with guidance. In theory no depending on a few other circumstances: in practice absolutely. The problem is so many systems are connected now at hmrc and benefits, not having that data with hmrc can cause multiple problems.