Dividends / Salary. Permie halfway through tax yr.

**SueEllen** · 3 July 2011, 20:54

Have a word with your accountant so if you have received more than the lower earnings limit for NI they don't do a payroll for you this tax year. They will also tell you how much you can take out as dividends to ensure you don't meet the higher tax band.

The tax band limits are here -HM Revenue & Customs: Income Tax allowances

You do have an accountant don't you?

**MiniMani** · 3 July 2011, 21:03

Originally posted by SueEllen View Post

Have a word with your accountant so if you have received more than the lower earnings limit for NI they don't do a payroll for you this tax year. They will also tell you how much you can take out as dividends to ensure you don't meet the higher tax band.

The tax band limits are here -HM Revenue & Customs: Income Tax allowances

You do have an accountant don't you?

Thansk SueEllen, yes i do have one. He's put together a nice spreadsheet where i can enter my dividends and there is a minus figure on the side, as long as that stays minus i'm under the threshold, so I was just wondering what I should enter for the 3 previous months as my 'dividend' in that field....

**Greg@CapitalCity** · 4 July 2011, 06:55

Probably zero

For the first three months while you were permanent, your dividends figure for the spreadsheet will almost certainly be zero (on the assumption you where not a shareholder of your employers company). To be sure regarding your personal tax calculation, just include the gross earnings to date figure from your P45 into the spreadsheet your accountant has provided. Don't forget to add any other sources of income too - any dividends from shares in public companies you may hold, bank interest (although usually small these days due to awfully bad interest rates on savings).

Good luck!

**psychocandy** · 4 July 2011, 08:24

Originally posted by SueEllen View Post

Have a word with your accountant so if you have received more than the lower earnings limit for NI they don't do a payroll for you this tax year. They will also tell you how much you can take out as dividends to ensure you don't meet the higher tax band.

The tax band limits are here -HM Revenue & Customs: Income Tax allowances

You do have an accountant don't you?

Im in a similar situation. Received PILON when I was redundant in April so thats 12K I've already been paid.

My accountant has advised me to not pay myself a salary this tax year but instead just do dividents. Obviously, I have to take into account the 12K already earned to make sure I dont exceed the upper tax threshold ideally.

**MiniMani** · 4 July 2011, 18:37

Thanks all, you've been helpful! Will have a look on my p45 when I get it, and speak to my accountant too.

**VectraMan** · 4 July 2011, 19:13

Originally posted by MiniMani View Post

Before July 2011 I was a permie. I therefore obviously accumulated towards my earnings limit for this tax year threshold which from reading on the HMRC website seems to be 37,400 for 2010-2011.

£37K + your £7.6K or so allowance.

So roughly it's £37.4K+£7.6K = £45K - whatever you've earned under PAYE before tax (i.e. salary and bonus) = the amount you can earn without going into the upper rate.

However there's a bit of nastiness for dividends in that they have a 10% tax credit. Which means you need to divide the above by 1.1 to get the true figure. Thankyou Gordon.

**Sockpuppet** · 4 July 2011, 19:43

Bear in mind that even if you don't intend to take a wage this year you'll still need to register for PAYE and run payroll (i.e. send nil acknowledgements).

**psychocandy** · 5 July 2011, 08:45

Originally posted by Sockpuppet View Post

Bear in mind that even if you don't intend to take a wage this year you'll still need to register for PAYE and run payroll (i.e. send nil acknowledgements).

Are you sure thats true?

**Scrag Meister** · 5 July 2011, 10:09

Originally posted by VectraMan View Post

£37K + your £7.6K or so allowance.

So roughly it's £37.4K+£7.6K = £45K - whatever you've earned under PAYE before tax (i.e. salary and bonus) = the amount you can earn without going into the upper rate.

However there's a bit of nastiness for dividends in that they have a 10% tax credit. Which means you need to divide the above by 1.1 to get the true figure. Thankyou Gordon.

2010-2011 (to April 2011) was £37400 and £6475 tax free allowance.
So ignoring the 150k+ super tax you pay 40% from £43875.

2011-2012 (to April 2012) is £35000 and £7475 tax free allowance.
and in the current fiscal year you pay 40% after £42475.

Dividends / Salary. Permie halfway through tax yr.