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

What you need to know when your Company is Dormant...

A dormant company is not accountable for corporation tax purposes. There is no need to let Companies House know that you...

Click to read more >

Sence Alphabet

Do you know your Sence Alphabet? Annual Accounts Bookkeeping Compliant Digital ...

Click to read more >

VAT on hotel deposits

When you book a stay at a hotel for business use you usually have to put a deposit down at the time of booking, however,...

Click to read more >

Is it a Car or is it a Van?

The argument about whether a vehicle is a company car or van is back. It’s the differential in tax payable on company ...

Click to read more >

Teachers to have loans reimbursed

The government have now published details of how teachers in shortage subjects in certain parts of the country will be a...

Click to read more >

Tax and Paid Carers

When you foster children your local council will give you payments. HMRC treats paid foster and other carers as running ...

Click to read more >

Can a director be paid before trade begins?

New Companies often incur start-up costs before they begin trading. But… is it sensible from a tax and NI point of vie...

Click to read more >

Vat when incorporating your business

The motive for incorporating a business, that is working through a company instead of being self-employed or in partners...

Click to read more >

How can we help?




I would not hesitate to recommend the team at Sence, regardless of how long you have been in business and irrespective of the size of your business.

Rebecca Hogarth
Rebecca Hogarth

Click to read the full testimonial >