• Glad to find this thread. I'm a freelancer who's worked as a PAYE contractor through an umbrella for years but after a break from working, decided I should set up a limited company. Partly to maintain a salary and claim training as expenses in between contracts.

    Wish I hadn't. Really don't like the grey areas and flexibility in tax arrangements.

    Is the ethical answer simply to pay exactly as much salary as you actually need, claim all valid expenses, make pension contributions, and avoid dividends as far as is possible?

  • As far as I'm concerned, as long as I'm paying what tax I'd pay under PAYE, that's pretty much legit. A "corporation" of one person paying 19% up front means I don't mind paying less on dividends. I might have got this completely arse-about-face, as is my tendency.