dipper: ...

 

Paying a Salary

 

Don’t pay yourself a PAYE deducted salary. There are rule around this and some issues ...



Would you expand your comments around LTC please? As I understood it, for an "ordinary" close company (not an LTC) it was accepted by IRD (though not codified in tax law) that a company could, after the end of the company's financial year, calculate how much "salary" to pass on to a shareholder/employee and claim the expense in the company accounts for the financial year past, even though the payment would be made after the end of the company's financial year past. For an LTC deduction from the company's income would be possible only for PAYE-deducted salary (which you recommend against)? On the other hand a zero PAYE-deducted salary seems to imply the company is paying nothing for the shareholder/employee's labour and IRD seems to have reservations now about shareholder/employees being artificially underpaid salary for company tax purposes.

 

Extracting a dividend or capital from a company seems to involve more "certificates" (solvency etc) than paying a salary.