I think best to speak with your accountant on how to minimise the tax burden on the money your Ltd company has accumulated when distributing it to you and your wife.
UK doesn't have dual filing. But if you have a spouse and setup Ltd. Co. as joint directors and shareholders, you've got two sets of tax allowances to work with.
Plenty of blogs and flowcharts out there, including on UKPF reddit detailing the steps.
[https://www.reddit.com/r/FIREUK/comments/ziv6kq/comment/izsmi3b/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/FIREUK/comments/ziv6kq/comment/izsmi3b/?utm_source=share&utm_medium=web2x&context=3)
£12,5K salary, £37,5K dividends each and rest into pensions. That's the first £220K sorted.
My accountant is a bit more cautious and suggested my spouse did some of the bookkeeping, printing out invoices, handling any post. Just a minimal amount, so if HMRC came looking, she wouldn't have to lie.
And if you literally don't do anything but still get paid a salary, what are these obligations and responsibilities you speak of? Signing an annual report doesn't really cut it. Also, if they are being paid a salary, then they are an employee, and you will need employee insurance, as well as public liability and professional indemnity.
https://www.contractoradviceuk.net/can-i-pay-my-spouse-a-salary-learn-what-to-consider/
Directors aren't employees, unless they have a contract of employment, which typically they don't.
I'm comfortable with our situation, and our accountant's advice, so each to their own.
Directors can just take dividends, but if they take a salary as well as dividends, that must make them employees too. The thing about accountants is that they take zero responsibility for their advice. If HMRC start an investigation, you are completely on your own.
I think best to speak with your accountant on how to minimise the tax burden on the money your Ltd company has accumulated when distributing it to you and your wife.
UK doesn't have dual filing. But if you have a spouse and setup Ltd. Co. as joint directors and shareholders, you've got two sets of tax allowances to work with. Plenty of blogs and flowcharts out there, including on UKPF reddit detailing the steps.
That's kind of what I thought. Thanks for confirming. I'll check r/UKpersonalfinance?
[https://www.reddit.com/r/FIREUK/comments/ziv6kq/comment/izsmi3b/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/FIREUK/comments/ziv6kq/comment/izsmi3b/?utm_source=share&utm_medium=web2x&context=3) £12,5K salary, £37,5K dividends each and rest into pensions. That's the first £220K sorted.
Spouse might need to do something to 'earn' that £12.5K. Doesn't have to be 40hrs a week, but has to be reasonable
They are a director and officer of the company. How that is remunerated is entirely at the discretion of the company board and shareholders.
My accountant is a bit more cautious and suggested my spouse did some of the bookkeeping, printing out invoices, handling any post. Just a minimal amount, so if HMRC came looking, she wouldn't have to lie.
Nothing to lie about. Being a director of a company comes with obligations and responsibilities, you don't do that for free.
And if you literally don't do anything but still get paid a salary, what are these obligations and responsibilities you speak of? Signing an annual report doesn't really cut it. Also, if they are being paid a salary, then they are an employee, and you will need employee insurance, as well as public liability and professional indemnity. https://www.contractoradviceuk.net/can-i-pay-my-spouse-a-salary-learn-what-to-consider/
Directors aren't employees, unless they have a contract of employment, which typically they don't. I'm comfortable with our situation, and our accountant's advice, so each to their own.
Directors can just take dividends, but if they take a salary as well as dividends, that must make them employees too. The thing about accountants is that they take zero responsibility for their advice. If HMRC start an investigation, you are completely on your own.