Revenue income below 35k - does it make sense to pay dividends?

[AlexKol]

Hello guys, another rookie question.
I expect to make just over 30k revenue as wasnt working all year because reasons. It's my first year as ltd contractor so correct me if I'm wrong.
Does it make sense to declare dividends if I can only draw them after paying 19% corporation tax and then 7.5 dividend tax outside the 5k allowance? If I paid myself as salary I'd pay 20% therefore less? Where is the error in my train of thought? Thanks for any input!

[PhiltheGreek]

The error is in thinking that income tax is the only tax you should consider. You would also need to pay National Insurance of 12%. And your Ltd would also need to pay employers national insurance of something like 13.8%.

It may help to run some numbers through a calculator to get an idea of the differences.
One should also ask one's accountant, if one doesn't have one then phone round a few for a chat - they'll love you for it today

[northernladuk]

Get an accountant.

[NotAllThere]

...if one doesn't have one then phone round a few for a chat - they'll love you for it today

This is a very good point from His Highness. When you get an accountant, get them to change your year end to a month where they're less busy with people's tax returns.

[washed up contractor]

Get an accountant.

I can see why you was forum personality winner. In 2011!