HMRC announced that from 6th July they were changing the National Insurance (NI) thresholds, meaning you can earn more each year before paying NI.

If you are a One director only company, this would not have affected you, however, those who have two or more directors or employees, you may have seen an increase on your payslip for your director salary.

This is to make use of this new allowance and will save extra corporation tax of around £511 per director salary.

However, please be aware that if you draw this extra salary and do not adjust the monies you draw as dividends, you may reach the end of the tax year and realise you have hit the higher rate tax or increased your personal income when you try to keep this consistent each year.

Therefore, we advise that if this is something you do, please reduce the dividends taken in line with the salary increase.

Please contact us should you have questions with regards to this so we can explain further if needed.

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