{"id":5157,"date":"2016-06-10T16:16:34","date_gmt":"2016-06-10T15:16:34","guid":{"rendered":"https:\/\/www.qualityformations.co.uk\/blog\/?p=5157"},"modified":"2024-11-08T12:59:33","modified_gmt":"2024-11-08T12:59:33","slug":"tax-rates-allowance-limited-company-directors","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/tax-rates-allowance-limited-company-directors\/","title":{"rendered":"Tax rates and allowances for limited company directors"},"content":{"rendered":"
\n Last updated: 8 Nov 2024<\/strong>\n <\/div>\n \n

If you are a company director, it is important to be aware of Income Tax and National Insurance rates and thresholds, dividend tax requirements, and the way in which you can pay yourself through a limited company.<\/p>\n

Ideally, you should consult an accountant for professional advice and tax-saving strategies, but we\u2019ll provide a brief overview of tax rates and allowances to get you started.<\/p>\n

The tax rates and allowances stated in this article apply to the 2024\/25 tax year, which runs from 6th April 2024 to 5th April 2025.<\/p>\n

What tax does a company director pay?<\/h3>\n

Directors of limited companies are usually also shareholders. In fact, many small startup companies are one-person operations, whereby the only person who owns, manages, and works for the company is the single director-shareholder-employee. Whatever the setup, the following tax rates and allowances may apply:<\/p>\n

Income Tax<\/h4>\n

As a company director, you are normally classed as an employee for tax purposes, so you will need to register your company as an employer<\/a> and operate Pay As You Earn (PAYE) as part of your payroll.<\/p>\n

You will be required to pay Income Tax and Class 1 National Insurance contributions (NIC) through PAYE on the wages you receive from the company.<\/p>\n

No tax or NIC will be due on the first \u00a312,570, which is your tax-free Personal Allowance<\/a> for the 2024\/25 tax year. Above that amount, you will start paying Income Tax and National Insurance on your earnings.<\/p>\n

If you live in England, Wales, or Northern Ireland, you’ll pay the following Income Tax rates on your director’s salary:<\/p>\n