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Where Taxpayers and Advisers Meet

Single Director, No PAYE, Dividend only...but NIC for 2016/17

JohnDW
Posts: 2
Joined: Fri Apr 08, 2016 10:30 am

Single Director, No PAYE, Dividend only...but NIC for 2016/17

Postby JohnDW » Fri Apr 08, 2016 10:48 am

Hi,
I run a small company, single director and sole shareholder. Historically I have take all earnings from the company via Dividend.
Whilst there are significant changes to Dividend taxation for 2016/17, what are the implications for NI contributions so I maintain a 'Stamp' for each year.
With No PAYE, there is no wage so nothing to pay NIC on.

I would like to not enrole for PAYE as (for this very simple company) it just adds paperwork and administrative overhead, any Tax gains seem to be offset by administrative time and costs.
Any thoughts are appreciated.

jpcentral
Posts: 924
Joined: Wed Aug 06, 2008 3:28 pm
Location: Loughborough
Contact:

Re: Single Director, No PAYE, Dividend only...but NIC for 2016/17

Postby jpcentral » Fri Apr 08, 2016 3:09 pm

You would need to pay a voluntary contribution of £14.10 per week (£733.20 per annum)

Not sure why you think it isn't worth the effort of setting up a PAYE scheme.

Single director paid £8,060 per annum on a monthly basis saves about £1,612 in corporation tax. I don't know what your accountant charges but we only charge between £50 and £80 to run the payroll and that includes the journal entries into the bookkeeping system if we have access.

To my simple mind a cost of less than £100 for a tax saving of £1,600 (plus a pension annual credit) makes perfect sense.
John Perry
Central Business Services
Loughborough
http://www.centralbusiness.co.uk

SteLacca
Posts: 447
Joined: Fri Aug 07, 2015 2:17 pm

Re: Single Director, No PAYE, Dividend only...but NIC for 2016/17

Postby SteLacca » Fri Apr 08, 2016 3:51 pm

Re above. A salary of £8,112 saves fractionally more.

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: Single Director, No PAYE, Dividend only...but NIC for 2016/17

Postby bd6759 » Fri Apr 08, 2016 5:25 pm

If you have not historically taken a salary, how have you previously maintained your contribution record?

JohnDW
Posts: 2
Joined: Fri Apr 08, 2016 10:30 am

Re: Single Director, No PAYE, Dividend only...but NIC for 2016/17

Postby JohnDW » Fri Apr 08, 2016 5:31 pm

Thanks all.. I'll look at the numbers again.


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