Hello
My business partners and I are debating whether we should pay ourselves regularly as salaries with national insurance contributions or as occasional dividends.
I'm ostensibly self-employed but also am one of three company directors in a small business. The small business is in a totally different field of work to my normal self-employed work.
At the moment the majority of my time is going into this business and it is where most of my income is coming from. Ideally I'd like to be paid a monthly salary because it's manageable and I'll always know that the money is coming in.
If I'm paid by the company as a salary, there will be PAYE and NI insurance deducted. But do I then have to pay tax again when I acknowledge these payments on my accounts as a self-employed person?
What about if I was paid on a dividend? From what I read there is less of a tax burden on dividends - but again, would I be taxed again when the dividend is reported on my personal accounts?
Does the Inland Revenue take a view as to whether self employed people can be directors of totally different companies? And does it make any difference from their point of view whether someone is paid once a month (a "salary") or once every few months (a "dividend")?
Thanks for your time.
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