How to Balnce the Taxman/Lenders

D

davordaz

Guest
Simple Scenario
I am a PAYE employee of My own Company . I pay myself 20000 k per annum so as to minimise my PAYE/PRSI outlay . The company (i am the only employee) takes in about 100000 per annum . I want to maximise the amount of credit I can get for Property , What Should I do , If I pay myself alot to Proove income I pay almost half in TAx , if I limit my tax , my own income is far percieved as been alot less than it really is . I would really appreciate any helpful advice on this Issue
 
I pay myself 20000 k per annum so as to minimise my PAYE/PRSI outlay . The company (i am the only employee) takes in about 100000 per annum
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What do yo do with the other 80k?
 
You can pay yourself up to €29,400 if single and pay only 25% IT and PRSI (assuming proprietary director) on income (less credits).

What you’re hoping to hear is that a bank will take into account your company has income of approx €100k. This is doubtful, as your company is a separate legal entity. If you default on your loan repayments the bank cannot go looking for your company to pay your debt. So, your money is protected from Tax, but that protection limits it – as it’s not legally your money. It belongs to the company you own.

However, bear in mind that you’re presumably paying approx 12.5% Corporation tax on your company’s profits. So, at the moment you’re paying an effective tax rate of 25% on income withdrawn as salary +12.5% on profits - effectively double taxation.

It is possible you will eventually take this money out of your company and pay 42% income tax, after already paying 12.5% corp tax.

Sorry, rambling a wee bit…
 
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