I'm a director of a UK limited company and working as a contractor, and my contract is due to end in December.

For the rest of the tax year I still don't know whether I'll then start a new contract or whether I'll then start permanent employment and get paid a salary.

This means that I still don't know whether/how much I want to pay myself as a (low) director salary from the ltd company until I know what my job situation is in the new year, as only then can I calculate my optimal ltd company payment strategy (salary vs dividends).

In the meantime, does anyone have any advice on what to report to HMRC PAYE? Am I best not paying myself any salary for now and submitting an EPS, then sending an FPS adjustment once I know more in February/March time and I end up going with the standard £8,424 salary threshold?

I appreciate that hiring an accountant would be advised in this situation, but if the answer is simple and clean cut then I thought it'd be worth asking.

Many thanks!

  • First query aren't you using a payroll software ? If not why not ? – DumbCoder Aug 10 at 11:43
  • Yep using payroll software so it's easy to submit the EPS or FPS - I guess what I'm really asking is if I don't pay myself any salary now, is it ok to submit an EPS for now and then backdate any ltd company director salary payments if it turns out I won't start any permanent employment between January and end of the tax year. – AMax Aug 11 at 12:41

Why don't you just max out to the £8424 salary, then not pay yourself a salary till the end of the tax year (live off dividends until end of june). do you have an accountant ?

  • Thanks daneyh, yep I could do, but if I then end up starting a permanent job in January 2019 I'll earn more salary for the rest of the tax year and heavily go over the £11.8k income tax allowance, so it would have been better to not pay myself any salary through the limited company (just dividends) and use the income tax allowance for the permanent job instead. But that scenario is hypothetical so my question is more about what I should report for payroll for now and what payroll reporting adjustments I could make later on in the tax year based on whether I start a permanent job or not. – AMax Aug 11 at 12:45

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