Salary advice - working under new Ltd Co., with earnings from previous employment
I have recently set up as a Limited Company for freelance / contract work.
I was in full time employment prior to this, with earnings this tax year of £7,046.15 (£1,085.20 paid in tax).
I understand the general advice is to pay yourself somewhere between the LEL and your personal tax free allowance (my tax code is 647L).
Given that I have already earned more than my personal tax free allowance this year, it seems to me that I should not pay myself any salary from my company, and instead draw all earnings as dividends.
Is this acceptable? Or do I have to pay myself a salary as a Director?
Additionally, if I do draw all earnings as dividends, will I have already made the necessary contributions for state pension this tax year from my previous income?
I presume I will also be due a tax rebate at the end of the year, as I have paid tax at a pro-rata rate based on a 40k salary, but was only in employment for just over 2 months..
Many thanks for your advice!
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