NI and thresholds etc

[psychocandy]

OK, so the PT is £672 a month. Anything over this you pay NI at 12%?

So if you earn, £100 one month you'll pay zero, but £1200 next month means you'll pay (12% of £1200-£672) £63.36?

Alternatively, if you earn £650 each month you'll pay zero because you're below each month?

Seems a bit of an unfair way to do it. If an employer screws up your overtime and forgets to pay one month and pays it all the next it could cost you more the next? (But I guess only if you'd have been below £672 one month?)

But I digress. Am I right that its different if you're a director? How does it work differently? I know I pay £10K a year, but only pay NI for the last few months of the year.

[Kenny@MyAccountantFriend]

As a director you get the annual allowance up front against your income and only start paying NI once your income exceeds the allowance.

This is why if paying the personal allowance as a salary NI only kicks in a round January.

[northernladuk]

Would that be about the time you exceed the threshold?

[northernladuk]

Interesting and pretty clear (dunno about accurate) guide on the figures for next year including new divi tax here...

Best Directors Salary and Dividend Levels 2016/17 - JF Financial : Accountants

[The Spartan]

Interesting and pretty clear (dunno about accurate) guide on the figures for next year including new divi tax here...

Best Directors Salary and Dividend Levels 2016/17 - JF Financial : Accountants

That was really useful thanks NLUK, even PC should be able to follow the options laid out in that article.

[psychocandy]

That was really useful thanks NLUK, even PC should be able to follow the options laid out in that article.

Hey spartie butti !!!! I just follow what my accountant recommends!

[northernladuk]

Hey spartie butti !!!! I just follow what my accountant recommends!

So why not ask them this then?

[psychocandy]

Interesting and pretty clear (dunno about accurate) guide on the figures for next year including new divi tax here...

Best Directors Salary and Dividend Levels 2016/17 - JF Financial : Accountants

Nice on NLUK. Useful post for once :-)

One thing which I may have got wrong in my head. The first £5K. I assumed this was taxed as normal? i.e. as we do now. And only anything ABOVE £5K accrued the extra 7.5% on top.

But this bit in that article:-

A new dividend allowance has been introduced which means that an individuals first £5,000 of dividends are tax free.

seems to indicate its zero on this first £5000? Thats not right is it? If that was the case you'd 'save £1000 on that first £5000 and not be "down" until you paid out £13333 dividend.

[The Spartan]

Hey spartie butti !!!! I just follow what my accountant recommends!

so you're a sheep then? You are allowed to ask questions, especially when you're paying for their expert advice.

Or is it you're just looking to get a rise out of NLUK?

[The Spartan]

Nice on NLUK. Useful post for once :-)

One thing which I may have got wrong in my head. The first £5K. I assumed this was taxed as normal? i.e. as we do now. And only anything ABOVE £5K accrued the extra 7.5% on top.

But this bit in that article:-

A new dividend allowance has been introduced which means that an individuals first £5,000 of dividends are tax free.

seems to indicate its zero on this first £5000? Thats not right is it? If that was the case you'd 'save £1000 on that first £5000 and not be "down" until you paid out £13333 dividend.

The first 5k doesn't attract the dividend tax so it's:

11K Personal Allowance

5k divi's @ 0%

27k divi's @ 7.5% = £2025 tax payable to HMRC

Total £43k