Directors, salary & dividends
You need PAYE once you pay yourself a salary above the lower earnings limit or have another job. When registration is required and when it is optional.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityYou must register for PAYE if you pay a salary at or above the lower earnings limit, provide benefits, or already have another job or pension. If you take dividends only, or pay below those thresholds with no other income, registration may not be required.
Why most sole directors register anyway
Obligations once registered
You must register for PAYE if you pay a salary at or above the lower earnings limit, provide benefits, or already have another job or pension. If you take dividends only, or pay below those thresholds with no other income, registration may not be required.
A salary at the secondary threshold gives a corporation tax deduction and, at or above the lower earnings limit, a qualifying year for the state pension. Both require payroll to exist and RTI submissions to be filed, usually monthly.
Registration takes a few days and the payroll run itself is quick. The cost of running it is small compared with the value of a qualifying pension year and the deduction.
File a Full Payment Submission on or before each payday, an Employer Payment Summary in months with nothing to report, pay any PAYE and NIC by the 22nd of the following month electronically, and issue a P60 after the tax year ends.
Late RTI submissions bring penalties even where no tax is due, so an unused payroll scheme left open is a liability. Close it properly if you stop paying salary.
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.
Local help
We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.
Frequently asked
Yes. An annual scheme can be arranged with HMRC where a single director is paid once a year, which cuts the admin.
Then any company salary is taxed under a BR or D0 code, and PAYE registration is required.
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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Pick a time that suits you and a qualified accountant will call you about your company, deadlines and fees.
Appointments run monday to friday, 9:00am to 5:30pm. Your confirmation is emailed straight away.
