Hi
In a company structure, if I receive personal service income (if I am the only person who earn the income, no other employees), can I pay a salary to myself? I have to pay other expenses to run the company as well. how can I do this correctly?
Thanks
Hello @Prasa1
You can be a director and an employee at the same time, and whilst PSI wouldn't normally affect you if you're an employee receiving only salary or wages, the PSI rules may apply if you are operating as a company.
If the PSI rules apply, the company will need to attribute the PSI to each individual (in this case, yourself) who performed the services.
There are instructions on our website that should help with:
Working out if the PSI rules apply
Obligations for company
Completing your tax return
If you are both a director and employee of the company, you may also find this previous thread interesting, which talks about the difference between wages and directors fees: Can a director receive both director's fees and wages?
Hope this helps.
TonyATO
Hello @Prasa1
You can be a director and an employee at the same time, and whilst PSI wouldn't normally affect you if you're an employee receiving only salary or wages, the PSI rules may apply if you are operating as a company.
If the PSI rules apply, the company will need to attribute the PSI to each individual (in this case, yourself) who performed the services.
There are instructions on our website that should help with:
Working out if the PSI rules apply
Obligations for company
Completing your tax return
If you are both a director and employee of the company, you may also find this previous thread interesting, which talks about the difference between wages and directors fees: Can a director receive both director's fees and wages?
Hope this helps.
TonyATO
Thanks TonyATO.
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