As the director of your own limited company you are actually the employee too and it is worthwhile considering putting yourself on the payroll. All taxpayers have a tax free allowance of approximately £7,500 a year (for the year 2011-12) and my reliable accountant sources assure me that if you were to take this in dividends, it would be taken after the Corporation Tax has been calculated.
The figures work like this; to take a dividend of £7,500 your company would need to make around £9,400 in profits before tax. If you take the same £7,500 as a salary you would save over £1875 in tax this year. This is true for all directors of your company. Of course, it will depend on your profits for the year and your accountant is the best person to advise you on this and the need for you to be on PAYE.
There is another benefit to running a payroll for directors and that is the NI contributions. Even if your earnings are below the limits for deducting NI, you will still be credited for being ‘in the system’ however, I think most accountants would agree that it is worthwhile making some NI contributions.