Hi @yvonne19632022-h
In terms of recording it - I'd suggest you go back to your advisor (accountant?) to ask them their preferred method. If they're advising you to do this, you should make sure they've explained it properly as it's your neck on the block, not theirs!
The reason for doing it this way is (significantly) reduced tax & national insurance.
Your company must be ltd (to pay dividends).
Current PAYE & NI thresholds are just over £12500 - so, at £1000 per month you won't be paying anything.
Wages are paid out of company expenses (before tax).
Dividends are paid out of company profits (after tax) so you need to be sure that the company is making sufficient profit to pay £2000 per month.
You will pay personal tax on the dividend but this is different to PAYE (& generally lower).
You don't pay NI on dividends.
Hope this helps.
