Dividend and personal income tax accrual

[Scrag Meister]

Assuming that I am just over the 40% income threshold and am about to pay myself an £8000 dividend.

How much of the 8k should I put aside for personal tax.

1. £8000 * 22.5%
2. £8000 * (10/9) * 22.5%
3. Something else?

Thanks in advance.

"WTF are you doing paying any higher rate tax? You should be ......." comments are banned.

[rmmc]

£8000 x 25% = £2000.

[Scrag Meister]

£8000 x 25% = £2000.

OK thats the same as option 2, thanks.

[DeludedAussie]

£8000 x 25% = £2000.

Can you explain why? He has already paid 21% tax - Dont you pay the additional (19%) making a total of 40%?

[Nixon Williams]

Can you explain why? He has already paid 21% tax - Dont you pay the additional (19%) making a total of 40%?

No.

The company has paid the 21% corporation tax, not the individual.

The higher rate of tax for dividends (assuming the £150K threshold is not an issue) is 32.5%, of the gross dividend, less the 10% tax credit leaves 22.5% of the gross dividend or 25% of the net dividend.

Alan

[ASB]

Assuming that I am just over the 40% income threshold and am about to pay myself an £8000 dividend.

How much of the 8k should I put aside for personal tax.

1. £8000 * 22.5%
2. £8000 * (10/9) * 22.5%
3. Something else?

Thanks in advance.

"WTF are you doing paying any higher rate tax? You should be ......." comments are banned.

2 (25% of the net). Unless you are > 150k.

Dividends and the Higher Rate Taxpayer > Need help completing your UK tax return ?
Limited company dividends - how much tax to pay?

[THEPUMA]

2 (25% of the net). Unless you are > 150k.

Dividends and the Higher Rate Taxpayer > Need help completing your UK tax return ?
Limited company dividends - how much tax to pay?

Or between £100K and £112,950 in which case it is 46% of the net.