Going over personal allowance - divi's

[ASB]

Taxed another 25% on top of what you have previously paid, so a nasty 45% or so.

Yes, and no.

To make it simple start with 100 quid of profit in a company and all your allowance are used elsewhere.

The company retains 79 quid after CT. You pay tax of 19.75 and retain 59.25. So its 40.75& overall (i.e. tax = 21% + (100 -21) * 25%).

Of course it's not so clever when the company is paying the 28% rate.

[ASB]

Anyway,if worried about IR35, put loads in pension then take 25% tax free at 50 and further tax free amounts each year? (don't know how much and if it is yearly actually)

goes up to 55 next year though.

[Billy Pilgrim]

What happens if you get a PAYE review and you lose.? All that moolah will be deemed salary. Hector will claim his pound of flesh.

Spend it.

And then be forced to sell the brand new shiny car for half the price and attempt to re-mortgage your new (negative equity) house to meet the PAYE bill?

Is it really such a good idea???

I dont think that if you havent got it in the company then you wont be asked to pay it!!!

[THEPUMA]

And then be forced to sell the brand new shiny car for half the price and attempt to re-mortgage your new (negative equity) house to meet the PAYE bill?

Is it really such a good idea???

I dont think that if you havent got it in the company then you wont be asked to pay it!!!

Surprisingly, that is usually the case. It is the company's liability and it is only in very rare circumstances that the debt can be transferred to the individual.

[GreenerGrass]

Surprisingly, that is usually the case. It is the company's liability and it is only in very rare circumstances that the debt can be transferred to the individual.

That is very interesting to know. I had always assumed you'd be automatically forced to remortgage the house or whatever to pay it.

[malvolio]

That is very interesting to know. I had always assumed you'd be automatically forced to remortgage the house or whatever to pay it.

Well not really - the company and you are two separate legal entities. Provided your assets are properly in your name, the company has no right to them.

There is a supplemantal question though: the directors of a company have a liablility for its finances. So while you might not be able to pay the bill, you might also not be allowed to be a director any more.

[Billy Pilgrim]

Surprisingly, that is usually the case. It is the company's liability and it is only in very rare circumstances that the debt can be transferred to the individual.

Well I never

Always thought it was a personal tax -- right -- off down the High street to put a smile on the faces of the estate agents and car salesmen