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Rachel767


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Director's salary and pension qualifying years
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Can I just check I'm right on this?

If I have a husband and wife directors only payroll, and they take a salary of £8060 per year each (just under the primary threshold so they pay no NI), will it still count as a qualifying year for state pension because they're over the Lower Earnings Limit of £5824 pa? They're keen to pay as little tax/NI as possible but obviously I don't want them to miss out on their state pension to save a few quid this year.

Thanks in advance :)

 

 



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Cheshire


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The NI system starts for income above the lower earnings limit, so for folk paid above this they will get a credit for NI even though you have not paid a contribution.

Is there any reason why you think Director's are any different on this score?

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Rachel767


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Hi Joanne,

The directors bit is irrelevant really, I suppose the question was just as to whether they would receive a qualifying year for a salary of £8060. I always thought this was the case, but for peace of mind I just wanted to check.

Thanks for your help.

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Leger


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A general question, is there any advantage to paying £8112 rather than £8060?  In other words paying a teensy bit of NI 



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abacus12345


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I don't think there is John, aside from a moral stand point I suppose.

As long as you've earned and processed over the lower earnings limit, all is good.
 

Up to the client how ethical they want to play it, we can only offer them the calculations. Me personally, I'd sooner pay 7.5% and no necessary NI :)



-- Edited by abacus12345 on Tuesday 14th of February 2017 12:24:38 PM

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Leger


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abacus12345 wrote:

I don't think there is John, aside from a moral stand point I suppose.

As long as you've earned and processed over the lower earnings limit, all is good.
 

Up to the client how ethical they want to play it, we can only offer them the calculations. Me personally, I'd sooner pay 7.5% and no necessary NI :)

 Thanks Johnny, I didn't mean ethically, I just wondered if paying a token amount made any difference to your pension or whatever.



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
abacus12345


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I know mate, the ethical line was for the benefit of others who search around the forum. I know you already know what I wrote. It is an interesting point, makes me wonder, why bother if you don't have to, and get no greater benefit!

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