Normally an employee, recently started doing it alone, I've incorporated a LTD and will instruct an account as soon as some cash comes in. Therefore please excuse my ignorance, I have been reading various websites, but I'm only partially more clear than when I started.
I'm sole director/shareholder and the only real employee / fee & income generator at this stage.
I work for a small number of different companies as a contractor in the business of trading land & property development, as a result in certain circumstances the income can be fairly healthy but the costs are pretty low.
My understanding of the most tax efficient income strategy for someone such as myself was a min salary or up-to £32,010 and draw down dividends of the net profits from the business.
At what level of dividend does this stop being the best route, I've been using some of the free calculators and they all seem to give slightly different messages for my projected circumstances (as follows):
I pay myself a salary of £32,010 for 13/14 (Assumption no additional interest or special benefits received).
Profits for same period are £200k.
Deduct £40k corporation tax, the net profit is £160k.
My understanding is when overall personal income exceeds £100k you loose your tax free allowance.
And as a higher rate tax payer, the dividend is liable for an additional personal tax liability of 22.5%, meaning it's taxed twice, although NIC only due on salary not dividends.
What is the best way for me to get my grubby mits on the net profits in the above situation?
Thanks in advance.