Touch wood, our CIC will be in a position to pay us a small income (8k) from next month. My accountant has suggested that (when we get a salary) the 2 directors would be essentially subcontractors paying tax through self assessment. I have read something elsewhere about PAYE which I know nothing about as I have always been self employed and which I have promptly forgotten. Can you help with where to get detailed advice as to how we should be moving forward and what systems we need in place before we start? Many thanks for your help.
Hi Katie, it depends if the payment is for your role as Director or for delivery of projects/activities/services. In your role as Director you can only take this as salary through PAYE and would need to register with HMRC as an employer. Typically this involves strategic work, marketing, business planning etc. If you then work on projects you could take this income as self employed income as subcontractors in certain circumstances. If you are working full time for your CIC then I would not recommend taking it as self employed income unless you have other work you do as self employed already. There are lots of issues/variations on this depending on your individual circumstances so it's best to get advice to clarify this.