How to register your new PAYE scheme

This article and video gives easy to follow, step by step instructions on registering a new PAYE scheme with HMRC.

A new scheme can be registered either online at www.hmrc.gov.uk , by telephone ( 0845 60 70 143) or in writing.

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Save Tax and National Insurance with your limited company

It is possible to reduce your (UK) personal tax and national insurance by running your business via a limited company.

The amount of tax and NI you can save will depend upon several factors including the company’s profitability, your personal circumstances and the amount of funds you wish to withdraw from the business.
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Cut red tape … get a P11d dispensation

For those of you who are one-person limited companies and/or have employees, you may be aware that reimbursements of expenses (excluding mileage within approved rates) should be reported to the Inland Revenue on P9d or P11d and included within the claimant’s tax return. This can add quite a burden onto the company’s administration and also incur fines if returns are not completed correctly or submitted late.

However, there is an easy way to reduce this administrative burden – apply for an expense dispensation.

Depending upon the type of business, various business expenditure can be included within the dispensation and may remove the need to complete p9d/p11d for some employees (car, fuel, health insurance etc benefits must still be reported).
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A quick guide for your new limited company

Getting at your profits

Extracting your profits from your company can be by a mix of wage (ie under PAYE) and dividend. In order to pay a dividend the company must have sufficient after tax profits. ie for a £10k dividend to be paid the company must have approx £12.7k pre tax profits (corp tax rate of 21%).

Do not be tempted to withdraw more than is legally available as dividend, as it would be “illegal” and HMRC may class it as a salary or a loan to the director (taxable benefit in kind if over £5k) and charge tax & NIC.

For more on how to extract your profits in a tax efficient way, read our article “Save tax and National Insurance with your limited company”.

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