Accountant Problems

[KittyCat]

Watchootalkinbout Kitty?

Your 7k salary comes off your company profit. Hence the 1400 a year saving in company tax. not personal tax.

So with better planning you could have:
1. Paid yourself 7k a year - saving 1400 in tax.
2. Planned your dividends better to not go over the 40% threshold (unless you required that money)

But I would have had to pay income tax & NI & employers NI as I had already earned over 7K & would have to do payroll based on figs from my P45? so I would have paid more tax - income tax & NI.

[TheFaQQer]

Although I didn't mention who my accountant is I was contacted by their owner who apparently trawls these boards and recognised my name. Have to say I was creeped out by the uninvited approach which claimed I had not made a complaint

Might I suggest that either you burn this CUK account, or PM admin and ask him to change your username.

Having a username on a public forum which links to your name / website / company name is asking for trouble, IMHO.

[prozak]

But I would have had to pay income tax & NI & employers NI as I had already earned over 7K & would have to do payroll based on figs from my P45? so I would have paid more tax - income tax & NI.

Ahh yes. Well it wasn't clear that you had already earned a salary this year.

I don't think I am the only one who read your post as suggesting you just paid yourself dividends.

[KittyCat]

Ahh yes. Well it wasn't clear that you had already earned a salary this year.

I don't think I am the only one who read your post as suggesting you just paid yourself dividends.

Assumptions Assumptions!

[psychocandy]

But I would have had to pay income tax & NI & employers NI as I had already earned over 7K & would have to do payroll based on figs from my P45? so I would have paid more tax - income tax & NI.

Ah. do you mean you've already earned more than 7K from previous/other employment this tax year? If so, you're right there is no benefit to paying yourself any salary this year.

[KittyCat]

Ah. do you mean you've already earned more than 7K from previous/other employment this tax year? If so, you're right there is no benefit to paying yourself any salary this year.

Yes exactly.

[Nixon Williams]

Ah. do you mean you've already earned more than 7K from previous/other employment this tax year? If so, you're right there is no benefit to paying yourself any salary this year.

You would still be able to claim Corporation tax relief, so it is still worth doing.

Alan

[prozak]

You would still be able to claim Corporation tax relief, so it is still worth doing.

Alan

Whoa!

you're gonna have to justify that one Alan.

Anything Kitty now earns is taxed at 20% personal (assuming she is still under the higher tax rate) - negating the CT benefit, essentially just passing the tax to her personal tax band.

Plus she pays 12% NI.
Plus there is 13.8% Employers NI.

Plus every pound she earns means 25% to be paid on the dividends she has already taken (she has already said she is over the higher tax rate due to dividends i think)


Or am I wrong?

By all means please prove me wrong. I am no expert.

[ASB]

Ahh yes. Well it wasn't clear that you had already earned a salary this year.

I don't think I am the only one who read your post as suggesting you just paid yourself dividends.

That would be me too.

"The last couple of years I've just taken all dividend" was what did it for me. Clearly she has other sources of income which invalidates the entire debate. Oh well.

[malvolio]

Whoa!

you're gonna have to justify that one Alan.

Anything Kitty now earns is taxed at 20% personal (assuming she is still under the higher tax rate) - negating the CT benefit, essentially just passing the tax to her personal tax band.

Plus she pays 12% NI.
Plus there is 13.8% Employers NI.

Plus every pound she earns means 25% to be paid on the dividends she has already taken (she has already said she is over the higher tax rate due to dividends i think)


Or am I wrong?

By all means please prove me wrong. I am no expert.

Less CT means more profit available for NI-free dividends perhaps...?