I'm getting more and more confused reading HMRC guidance. As a company director i want to optimize my wage structure,however I don't want to lose entitlement to some state benefits i.e. pension.When reading HMRC pages I found ,that as long as I'm earning more than £109 a week I keep the right to State pension " as long as you earn more than £109 a week (2013-14) you can still build up your entitlement to a State Pension and certain other benefits" and few pages further I found this "Class 1A and Class 1B contributions - paid by employers only - don't count towards any state benefits" .Can anyone clarify this?
You appear to be confusing employee with employer. As an employee of your limited company you will maintain your entitlement to certain benefits by earning above the LEL of £109.00 and as long as it is below £148.00, will pay no NIC either as an employee or the company as an employer. Employers contributions as you mentioned do not count towards state benefits. Note that for 2014-15 there is an allowance of £2000.00 against Employers NIC and therefore the optimum salary, depending on individual circumstances, should be £10,000.00 pa. hth
