Could anyone tell me the most tax efficient amount to pay the director of a company if the directors tax code is 810L. I assumed it was £675 so that the free allowance of £8105 was utilised in full but I have been told this week that it should be £624.
Don't forget that advising low pay to a director will effect their entitlement to state pension so by giving this advice to them they could sue you later for bad advice that has cost them in the long run.
Your PII will have a run off period of six years so if out of that period you become open personally to compensate for the clients loss which could prove very expensive.
Also, does your PII cover you to give tax advice?
I know that this is not the question asked but I've read the same thing again and again on this site where people are giving this sort of advice to clients without realising the potential repurcussions on their own business.
If you give the client this advice ensure :
i) that you fully explain the financial repurcussions of this action.
ii) You get that understanding in writing in a form that would stand up in a court of law.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
"You can earn up to £146 a week (2012-13) before you pay any National Insurance contributions. This is known as the 'primary threshold'.
However, as long as you earn more than £107 a week (2012-13) you can still build up your entitlement to a State Pension and certain other benefits. This is known as the 'lower earnings limit'."
I think the best amount of director's salary is 624 GBP in 2012/2012 tax year. You dont need pay any NIC and TAX. That case give you 7488 GBP of company tax deductible expense.
