Fiscal Year 19/20 – Avoid paying National Insurance
Selecting the optimal salary is a key question many small-managed businesses normally ask. In order to retain state benefits, you will want to Pay yourself above LEL, which is ยฃ 118 per week. Class 1 NI becomes payable for Employer and Employee if pay exceeds ยฃ 166 per week, this means you will start paying national insurance only above this amount, based on these numbers the optimal amount that an employee or a director needs to pay himself in order to retain access to certain state benefits but pay no NI is between ยฃ 118 to ยฃ 166 per week, or between ยฃ 6,136 and ยฃ 8,632 per year.
Using the ยฃ 3000 NIC allowance in 2019/20
The allowance is not available for companies where the director is the only employee and the sole director of the company.
RTI Burden for Small Companies
Small companies can sometimes struggle with the needs of Real-time payroll, an employer which wants to reduce its administrative burden can register under the Annual Payroll Scheme for RTI.
Payroll can be a complicated matter, with differentย tax bands, rules for benefits andย auto-enrolment requirements. Payroll can become complicated and costly if not done properly, but it can be one of the key methods to save tax and extract efficiently if done properly.
Clear House Accountants are London-based accountants and Payroll specialists in London who can help design bespoke services and smart solutions for your payroll and accounting needs.
