Salary Dividends Strategy
Becoming a director of a limited company will allow you to structure payments to yourself in a tax-efficient manner. This is known as a salary and dividends strategy. See our guidance on this below.
Becoming a contractor operating via a Ltd Company has many perks and benefits over operating PAYE and a primary example of this is being able to structure your income more flexibly via salary and dividends.
It is not uncommon for contractors to pay themselves a small salary and larger proportion of company profits as dividends, but this practice should be reviewed by an Accountant to ensure that you are operating compliantly and tax efficiently.
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