Paying a director

[JMB]

I have set up a property company with my mother, we are both directors.

As a way to get money out before paying corp tax, can I pay her a salary up to the tax threshold (she does not receive any earned income from elsewhere, but does receive unearned income from share divs etc.)?

If I can, do I also have to pay NI contributions for her, or can she 'invoice' the company for services rendered up to that amount?

Many thanks

JMB, London

[Ian McTernan CTA]

Paying dividends would be slightly cheaper overall than paying a salary. Salaries can be challenged by the Revenue as not being commercial and disallowed in the accounts.

Without knowing all the circumstances it is not possible for me to comment further, apart to ask who is going to prepare the accounts, corporation tax return, payroll, personal tax returns?

If you wish to discuss further I can be contacted at ian@imcternan.com. A charge would be made for my services but the initial meeting is free.
Ian McTernan CTA
McTernan Associates
Chartered Tax Advisers
50 New Bond Street
London
W1S 1RD

[JMB]

Thanks for your advice, food for thought!