his accountant has advised against him taking this route and has asked him to instead pay a higher salary.
By 'low salary' I mean a salary that would not extend into the 41% tax band.
That's very true. Just make sure you can proove you have nothing to hide.I understand it could draw attention from Revenue, but if you've nothing to hide then there's no problem.
I was advised by my accountant to take a salary below the 41% threshold and I agree with him. As far as I'm concerned, if all the expenses I am claiming are legit business expenses then it's nobody's business but my own how much I pay myself. If I can live off €35,400 per year then I'll do it. Surely there's no law against it?
I understand it could draw attention from Revenue, but if you've nothing to hide then there's no problem.
Fair enough. But, for example, if I was take a salary of €18k in order to avoid tax/prsi etc. and had legit expenses for €12k to get the same net result as a €35,400 salary, could this ever become an issue. Just curious?A salary of €35,400 per year would not normally be regarded as unusually low in this context.
Fair enough. But, for example, if I was take a salary of €18k in order to avoid tax/prsi etc. and had legit expenses for €12k to get the same net result as a €35,400 salary, could this ever become an issue. Just curious?
... his accountant has advised against him taking this route and has asked him to instead pay a higher salary.
The accountant has not advised either way,...
...
The other director wants to take a salary of approx €52,000 and not do anything with expenses.
...
So would it be correct to say that the 2nd director is costing the company money (at least in respect of Employers PRSI) by not making up his c.€50k salary by claiming expenses? Does this make sense?Assuming that, the 35k director would have a net income equivalent to a base salary of about 47k or so in real terms.
you cannot carry that forward from year to year without paying capital gains + service tax (can't remember the exact name at the moment).
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