Running a LTD company whilst being a full time PAYE employee

Soldato
Joined
17 Oct 2002
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2,988
Location
Fife, Scotland
Hi All,

If I was to start a limited company and be registered as the Director, would this affect my pay and tax system from my full time job with the NHS?

For example if the business made £20k profit in a year, while I made £30k salary with the NHS, would the tax man take more off me through my salary?
 
Don
Joined
7 Aug 2003
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44,276
Location
Aberdeenshire
Depends on whether you take money out of the business as a wage or as dividend, though I guess you would be taxed on that money rather than your NHS salary, you will need to submit a tax self assessment at a guess for them to work out what to tax you.
 
Soldato
Joined
5 Mar 2009
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3,050
Location
North
If you have a good long look into it you can pay yourself through a mixture of salary/dividend and directors loan therefore massively reducing your tax bill if done properly but as above you will have to self assess.
 
Soldato
Joined
3 Apr 2008
Posts
2,939
If you have a good long look into it you can pay yourself through a mixture of salary/dividend and directors loan therefore massively reducing your tax bill if done properly but as above you will have to self assess.

if doing that make sure you speak to a good accountant who will ensure you don't run the wrong side of the regulations and end up with a potentially costly tax investigation.
 

Guv

Guv

Soldato
Joined
24 Oct 2002
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3,257
Location
Warwickshire
Any decent accountant should easily be able to work out the most tax efficient way of paying yourself from the company.
Seeing as your personal allowance will be used up from your NHS job there won't be any benefit to you taking a mix of salary/dividend from the company. You may as well just take only dividends, but the timing could be important as you'll likely become a higher rate tax payer, so will want to minimise the higher rate tax you pay, while still getting the income you want.

Taking money out the company through a directors loan is possibly not a great idea unless it's already in credit (ie. repaying yourself for money you've previously loaned the company).
 
Soldato
Joined
23 Nov 2007
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4,939
Location
Lancashire, UK
As above, you will have to fill out a self assessment each year (as I do, I've been down this road. Do it online, it's vastly simpler). Since your tax free allowance each year is for YOU, then it will not make any difference in that regard.

I expect it's just a typo in your original post, but be aware that as a Ltd company, the company profits are just that, the company's, and will not count towards your income. Only your salary as an employee of that company will be your income. You will also need one other person, as the minimum legal requirement for the company is a Director and a Secretary, who must be two different individuals.

In terms of clever things like payment methods, I know zilch, so find yourself a good accountant.

Final point would be whether you NEED to be a limited company? There are other ways of setting yourself up as a trader without going the full distance.
 
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