Lots of reading has confused me.. help with basics

[RockyBalboa]

This basic rate is exclusive of the allowance, so you can earn up to £40,835 before entering the higher rate band.

The above isn't normally the case though is it?

anyway, with the above in mind, does it basically work out as follows:

2008-2009

Money from employment (Gross) = 6,035
LESS Personal allowance = 6,035-6,035=0
Total (non-savings) income = 0
Dividends (gross) = 40,835-6035= 34,800*
Gross income = 40,835

* as I understand it, the gross dividend is what is paid?

Thanks.

[dmini]

No the gross dividend is not what is paid. You have paid a notional 10%tax on your divis - which you never see. like with salary
Gross divi-tax=bit you get in your sticky mitts
Gross dividend must be used in calculations.

The basic rate band ALWAYS runs from the point you pay your first bit of tax. So it finishes at whatever the tax free allowance for yourself is +basic rate band.
You need to understand these basics quickly. they are important. Your accountant should help you - I am assuming you have one? As these are the real basics - it can get a lot mor complicated after this I would suggest you do - quickly

[slackbloke]

The above isn't normally the case though is it?

anyway, with the above in mind, does it basically work out as follows:

2008-2009

Money from employment (Gross) = 6,035
LESS Personal allowance = 6,035-6,035=0
Total (non-savings) income = 0
Dividends (gross) = 40,835-6035= 34,800*
Gross income = 40,835

* as I understand it, the gross dividend is what is paid?

Thanks.

No, the amount you have calculated for dividends to keep you believe the 40% threshold needs to include the notional tax. So you would pay yourself :

34,800 less 10%, i.e. 31320

that is a dividend of 31320

Tax credit of 3480 (31320/9)

The dividend + tax credit is used for self-assessment income purposes

[EvilWeevil]

Your accountant should help you - I am assuming you have one?

Have you seen any evidence to support this assumption?