The new rates of personal allowances and National Insurance come into effect on 6 April 2014. This means that the salary for many directors of small limited companies needs to be re-evaluated to ensure that it is tax efficient.
The change means you can increase your current monthly wage to £663 per month, or weekly wage to £153 per week. This would result in no Tax or National Insurance deductions (based on a standard 100L tax code) while still obtaining a National Insurance credit.
National Minimum Wage
Just a reminder that the National Minimum Wage rates came into force from 1 October 2013 and will still apply from 6 April 2014 for employees:
- 6.31 – Aged 21 and over
- £5.03 – Aged 18-20 rate
- £3.72 – Aged 16-17 rate for workers above compulsory school leaving age
- £2.68 – The apprentice rate, for apprentices under 19, or 19 or over and in the first year of their apprenticeship
Should you have any queries regarding this please do not hesitate to contact Green & Co.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.