It is common in owner-managed companies to pay the directors who own the shares, the maximum amount possible without incurring a class 1 national insurance contributions (NIC) liability, with the balance of drawings paid by way of dividends. 

The Spring Statement announced an increase in the primary threshold (Employees NIC)  to a figure that works out as £11,908 on an annualised basis for directors in 2022/23. The secondary threshold (Employers NIC) was left at £9,100pa.  If this is the strategy that you are currently following, then you can now have a pay rise to £758 per month. At this level you pay no National Insurance either as an employee or employer but are treated as if you do, so your NIC record is maintained and your entitlement to a state pension preserved.



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