Best setup (tax wise) for UK affiliates?

[bon300187]

Tweet

I have been setup as an LTD based in the UK for about a year now but it seems stupid the amount of taxes I pay at the moment compared to a couple of other people I have spoken to.

This is the way I do it at the moment:

I pay myself a salary which ends up costing a fair bit of tax each month on that alone, I have to pay my contribution for tax and NI and then I believe the company (me again) also pays a contribution so it adds up to be quite alot. This is what my accout stated to do as it's way over my head. From my understanding I then pay corporation tax on the companies total profit for the year?

I have however spoke to people are paying themselves in dividends so they don't have to pay any tax + NI on their wage, just on profits?

I'm just wondering if there are any other UK affiliates/internet marketers etc who have a better understanding of how to go about this.

Thanks

[hrbs]

I have been setup as an LTD based in the UK for about a year now but it seems stupid the amount of taxes I pay at the moment compared to a couple of other people I have spoken to.

This is the way I do it at the moment:

I pay myself a salary which ends up costing a fair bit of tax each month on that alone, I have to pay my contribution for tax and NI and then I believe the company (me again) also pays a contribution so it adds up to be quite alot. This is what my accout stated to do as it's way over my head. From my understanding I then pay corporation tax on the companies total profit for the year?

I have however spoke to people are paying themselves in dividends so they don't have to pay any tax + NI on their wage, just on profits?

Hi
Its more tax efficient to pay yourself a small salary to use your £6,475 personal allowance (or less if you have bank interest income) and pay the rest in dividends. If your salary is £476 per month you won't pay NIC but will receive credits towards your NI account. You will still need to run a PAYE scheme and submit end of year PAYE returns to HMRC.

Bear in mind that if you want to invest funds into a pension you may need to pay a higher salary.

I have several guides at tips.HRBS.biz which explain how this works and a spreadsheet which will illustrate the potential savings.

Regards

Keith
HRBS.biz