UK Inland Revenue Tax Advice

My wife and I run our web developement business from home and I currently know a small amount about tax but I've been wondering what is the best way to go about paying ourselves.

Obviously we both want to make sure our NI payments are made so we can get our pension etc.

I'm not going to tell you how much the business makes but if we wanted to pay ourselves £20K/year altogether what would you suggest the best way of distributing our salaries to be?

 

Stephen, have you tried www.inlandrevenue.gov.uk - you can go down the route of PAYE (pay as you earn) which basically means you give yourself a gross income, take off tax (which is calculated depending on your tax code) and national insurance (which is calculated on your gross pay)

You'll then come out with a net pay, and this is the value you pay to yourself as an income - you log all of this on a spreadsheet or software like Sage - you'll then get a tax return from the Inland Revenue each year, complete the form and complete P11d forms etc.

If you contact your local taxation office (will bein the local telephone book) you'll find that they are very helpful and will actually come out and visit you - you can also go on Inland Revenue courses based on PAYE.

Hope this helps

Darren

 

Find people who dont work and you trust, give them £4000ish (tax limit) each pa. then get them to get it back from them

 

DA, which tube station is that? I was in London on business a few weeks back! Finally got used to the tube system!

 

I cant remember, Ill take a look on my other machine later and bump the thread.

Next time you are coming down pm me and we'll go for a beer

 

Yeh bumping the thread might wake up weir!

Next time I'm in London I'll buy you a beer .. which reminds me, I went into one pub ordered a beer and the landlord said £3.80 mate, I looked at him and laughed and replied, is that for the keg down in the basement! It's £1.90 for a pint in my local pub!

 

On topic.
Its the taxes, thats how we fund the massive costs of law enforcement in Leeds

 

LOL dunno why Leeds has such a bad reputation! It's probably one of the less crime riddled cities in the County - unfortunately, due to the bombers coming from Beeston it has a bad reputation .. end of rant ... lol

 

I can't believe you guys talking about beer on my tax thread lol

Thanks for the advice Darren, I reckon I will give them a phone some time soon when I can talk again.

 

Stephen, when you can talk again? :O

The Inland Revenue have a bad reputation, but I have only good things to say about them - they certainly are very helpful to new businesses or anyone wanting training and advice.

It's in their interests to make sure that you do things right because it causes them more work lol

Time for beer guys

 

Yeah I've got the flu at the moment. lol

Well my Dad is a VAT man and he would always tell me that the Inland Revenue guys would be helpful. I dont know whether it will do my reputation any good saying that my Dad is a VAT man but never mind eh? lol

I just figured there's bound to be an optimum way of paying ourselves a salary and not doing ourselves out of income. I've only had to pay myself up until the last few months since Grace joined the business full time.

 

Is your question really about how to pay yourself as much as possible with minimum tax, or is it about how much NI you need to pay to guarantee your state pension on retirement?

If you are looking for the best way to pay yourselves, take into consideration the first £4895 of each of your annual salaries (standard personal tax allowance) is tax free. Usually an annual salary of £8k per year would mean you get the benefits of tax eficiency. You could consider paying the remainder in dividends