The 2018/19 income tax year draws to a close on 5th April so now is a key time to ensure that valuable tax relief isn’t wasted. If you’re a company owner/director with control over your remuneration you may need to act now.
Company director/shareholder salaries
The personal allowance for 2018/19 is £11,850.
Company director/shareholders should review what level of salary they have taken to date if they are pursuing a tax-efficient remuneration strategy. If the company is able to claim the employment allowance for employer’s (secondary) Class 1 NI you could withdraw further salary up to the level of the personal allowance.
If you are the only employee of the company the employment allowance won’t be available so you should restrict the salary taken to the employer’s (secondary) NI threshold of £8,424.
If your company is a one-man band, consider appointing your spouse or civil partner as a director before the year end and paying them up to the personal allowance as a salary. However, this will only be worthwhile if they have little or no income of their own.