Sorry. You need to upgrade your browser

You are using Internet Explorer 8

This is considered an out of date browser. This website has been developed with modern browsers in mind to allow it to display at its best in a wide variety of viewing situations - including mobile viewing. But we haven't supported older browsers like IE8. Please upgrade to the latest version of Internet Explorer - or try Mozilla Firefox or Google Chrome. Both are excellent browsers.

Thank you.

Chartered Certified Accountants
and Business Advisors

01530 267320

Directors Pay Structure 2017/2018 - What you need to know...


The tax free personal allowance for 2017/2018 is set at £11,500
The National Insurance earnings threshold is £8,164.  Earnings (salary) over this level will have National Insurance contributions due on them.
Both levels will attract Corporation tax relief at 19% however; if you are a one director only company, you will still be ineligible for the employment allowance as with the previous tax year. Therefore if you run with the £11,500 pay structure the company will be liable to pay some National Insurance.  Again, this will attract corporation tax relief at 19%.
We have detailed for you worked examples of both scenarios in their simplistic form to help you make your decision.
Based on a ‘profits’ figure of £45,000 see below for workings under both amounts:

  Option 1                    Tax Free Personal Allowance Option 2
Salary to the NIC Threshold
Profit £45,000 £45,000
Salary £11,500 £8,164
Employers NIC £460  
Gives Taxable Profits of £33,040 £36,836
Corporation Tax Due £6,278 £6,999
Profits Available for Dividends £26,762 £29,837
Dividends Within Personal Allowances   £3,336
Dividend Nil Band Rate £5,000 £5,000
Dividend Subject to Tax £21,762 £21,501
Personal Tax at 7.5% £1,632 £1,613
Net Cash Take Home £36,630 £36,388
Total Combined Taxes Due £8,370 £8,612

If you have any queries please contact Jane in the payroll department on 01530 267320 or email

21 Apr 2017

« Back to latest news

Latest news


The contributions into workplace pensions will rise to a 2% employer minimum and 5% total. They are currently 1% and 2% ...

Click to read more >

National Insurance

The lower earnings limit will rise by inflation to £116 per week and the thresholds for when national insurance kicks i...

Click to read more >

Tax rate and allowances

The personal tax allowance will increase to £11,850 from the new tax year. Therefore, the emergency tax code will be 11...

Click to read more >

Overtime Complications

Have you considered the ruling which says that voluntary overtime if paid sufficiently regularly must be included in hol...

Click to read more >

Bank Holiday Problem 2018

The holiday year in England and Wales is 1 April to 31 March, and you might not yet have looked at where Easter falls in...

Click to read more >

HMRCS’s interest rate rises

In August 2016 the interest rate HMRC charges you for not paying your tax bill on time (which tracks bank interest rates...

Click to read more >

Scotland’s Finance Secretary has made radical changes to income tax rates for 2018/19

The table below shows the Sottish income tax rates and allowances for 2018/19: Personal tax-free all...

Click to read more >

Another year of the flat rate National Insurance

From 6 April 2018, the flat rate Class 2 national insurance contributions for the self-employed was due to be scrapped; ...

Click to read more >

How can we help?




Good tax advice in a friendly and professional manner.

Dave Heard
Compressed Air Services Limited

Click to read the full testimonial >