I am a director of an Ltd company and it’s started to now make a profit, I have now given myself a wage below the personal tax allowance, and will start to give myself dividends! However I really want to keep away of not paying tax, as the business has all ready paid corporation tax and don’t want to pay twice!

Andy
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You could start repaying your loans to the company. But Get advice there are few hard and fast tax tricks that apply to everyone so see your accountant and ask what you should do in your case.
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As the advice suggests above, is there a directors loan to repay ?
If there is enough funds in the company you can begin to take a dividend and if this is under the higher rate band then there will be no further tax to pay.
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Yes I have loaned the company money from the funds from my property, what with the current house market, I would need to put that back in or I might have problems, so I really need to find I way of getting as much as I can out of the business to live without paying tax twice
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As mentioned above you can repay a directors loan without any personal tax implications and you could take a dividend if the company has adequate reserves.

Ask your accountant to work out what is best for your circumstances.

Feel free to PM me if need any help
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What’s the limit I can go to before I pay tax on dividends within one year! Say its 40k a year (which I am not sure it is) could I also have other benefits on top of this, or would that be included within the 40k, if not then what benefits could I take from the Ltd company being a director

Andy
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....... I have now given myself a wage below the personal tax allowance........

That wants to be at the Personal allowance rather than below it, that way you pay no tax but get Class 1 NIC credits. Can't remember the exact figure, but your accountant will know.

The only other free lunch that I know of is mileage allowance. Do you use your own car for business? You are allowed 10,000 miles pa at 40p/mile, and then 25p/mile thereafter. In round terms if you do 10,000 business miles per year, that's ?k pa to be had tax free. You must of course do those business miles, but your monthly mileage logs will show that clearly, linking each entry to appropriate business activity.
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That wants to be at the Personal allowance rather than below it, that way you pay no tax but get Class 1 NIC credits. Can't remember the exact figure, but your accountant will know.

That used to be what you had to do :(

However, due to the 10% tax rate fiasco, the NI and tax limits will no longer be aligned :mad:

You need to limit the salary to the starting point for NI ?,435 and not then new personal allowance of ?,035.

.. and tax is supposed to be simple :eek:
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I am a director of an Ltd company and it’s started to now make a profit, I have now given myself a wage below the personal tax allowance, and will start to give myself dividends! However I really want to keep away of not paying tax, as the business has all ready paid corporation tax and don’t want to pay twice!

Andy

Have you read the sticky at the top of the Accountancy thread as it will answer many of your likley questions.

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=60813


That used to be what you had to do :(

However, due to the 10% tax rate fiasco, the NI and tax limits will no longer be aligned :mad:

You need to limit the salary to the starting point for NI ?,435 and not then new personal allowance of ?,035.

.. and tax is supposed to be simple :eek:

Thanks for highlighting that necessary change. I am currently reviewing our salary structure and will take account of your good advice.
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That used to be what you had to do :(

However, due to the 10% tax rate fiasco, the NI and tax limits will no longer be aligned :mad:

You need to limit the salary to the starting point for NI ?,435 and not then new personal allowance of ?,035.

.. and tax is supposed to be simple :eek:

This thread on accountingweb (http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=185236&d=1031&h=1028&f=1026) ran an analysis of paying 5435 vs 6035. The verdict was pay 5435 as you will be 67p better off!! :eek::D
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