Limited company advice

Damo_hall:

Roymondo:

Harry Monk:
Agree with this. I do agency work on a PAYE basis, when I started my own limited company was still active from my owner-driver days so I could have worked on a limited company basis for £2 an hour more but when I did the maths it just wasn’t worth it. Possibly in my case it’s slightly different in that I can claim back all of the income tax I pay when the tax year ends but I figure I’d have to work a hell of a lot of hours to make limited company worthwhile.

I roughed out some figures, assuming 50 hours a week, every week.

Under PAYE (£10 per hour, paid over 52 weeks, as under current legislation you’d be entitled to holiday pay):

Gross pay £31,200
Tax (£3,940)
NI (£2,764)
Net pay £24,496

Running as a Ltd Co at £12 per hour, paid over 48 weeks (i.e. no holiday pay)

Company income £34,560
Salary (£11,500)
Employer NI (£445)
Accountant fees (£500)

Profit before tax £22,115
Corporation Tax @20% (£4,423)
Profit after tax £17,692

Assuming all profits paid as dividend, your total income from the company would be £17,692 + £11,500 = £29.192. There would also be a £400 employee NI deduction, so net figure of around £28,800

I’ve probably missed something along the way, but that’s pretty much the bare bones of it.

Yeah that helps mate cheers.

But not sure how you have worked out your gross pay as 10x50 = 500 x 52 =26000■■

£10 per hour x 50 hours per week £500. x 52 weeks per year is £26,000 per annum. But I’m not sure why he has assumed holiday pay at £5200 :open_mouth: Should be 28 days (around £2800 so the gross figure on PAYE would be more like £28,800).