Directors salary

Laura8192

I had advised a new client to take a salary of £641 a month for this tax year (rather than the sporadic amounts between £500 and £1,500 he had been paying himself....), however I have since been advised that £785 a month is better to pay his "stamp" for NI contributions, has anyone heard of this and do you have clients that do this?

groundy

We use £650 a month which I believe to be the most tax efficient. If you pay a salary equal to personal allowances then you are paying more in NI that CT saved. At £650 the NI is minimal but sufficient for all state benefits.

Rozzi Rainbow

We use £641 per month so no NI is payable. I understood this was still sufficient for all state benefits etc as it is above the LEL??

I agree that for a Ltd Co and director it's not beneficial to use up the tax allowance, but one of our clients is a sole trader who employs her husband, and in her case I believe it is beneficial to use up his tax allowance as she will save tax and NI.

Laura8192

seems like different people use different rates, do they definitely still get all pension entitlements if they only receive a salary of £641 a month as this is my clients biggest concern?

than you for all your comments, it is helpful to hear what different people do.