Drawing dividends over higher tax threshold - should I?

[TheFaQQer]

Granted you can Im sure but does depend on your lifestyle choice and commitments. I can see that is more doable if you have a teeny tiny mortgage.

Im seriously impressed if you can live off that in a year taking into account things like mortgages, cars, holidays, kids or maintenance, home improvements and unexpected things like stuff breaking...oh and of course Hector asking you to make SA payments on accounts every 6 months, granted lot less if your under the 40% threshold. Guess I just need to try and clear my debts quicker so I can at least try and get under it at some point in my life...

Well, you don't have to pay SA payments on account - I pay no income tax at all.

OK, white lie - this year, it was £10.18 I had to pay.

[rd409]

Granted you can Im sure but does depend on your lifestyle choice and commitments. I can see that is more doable if you have a teeny tiny mortgage.

Im seriously impressed if you can live off that in a year taking into account things like mortgages, cars, holidays, kids or maintenance, home improvements and unexpected things like stuff breaking...oh and of course Hector asking you to make SA payments on accounts every 6 months, granted lot less if your under the 40% threshold. Guess I just need to try and clear my debts quicker so I can at least try and get under it at some point in my life...

Well honestly, the ltd company has 2 share holders me and my wife. So we can really afford to take quite substantial amount out of the ltd, and still stay under the 40% mark. Also, if I were the only shareholder, then a permie would have to earn a salary of 61k to get the same amount of cash in hand after the tax and NI deductions. So the comparable figure should be 61k for the lifestyle. As i said, that is a very good figure if you consider, the number of people who earn quite lot less than that in a permie salary.

[MrRobin]

Income under 40% tax threshold is quite a lot to be honest. Even if you are the single shareholder it equates to something around 3500 a month plus expenses. That kind of income is definitely livable even in London imho.

Exactly. Equivalent permie salary is £62k so way higher than average.

I would suggest, smalldog, you could examine your outgoings to see where efficiencies can be made... you might find you can save a packet!