Official Summer 2015 Budget Thread

[Jog On]

Hi everyone

I'm sure we have the finest minds on here.....Did anyone understand that divvie thing?

I think you get 5000 tax free then after that they are taxed according to your income tax band? Ie -

>£5000 - 7.5% up till 40% income tax rate then 32.5% and 38.1%

So no more 0% up till 40% tax rate.

[disclaimer]I may have misunderstood[/disclaimer]

[tomtomagain]

This feels like a fairly substantial budget.

We'll have to see the impact over the next couple of weeks when the real details are announced.

[SimonMac]

Nope ... but you can bet you wont be paying less tax.

Did he say what the levels are for the 7.5% etc.?

How would this then work with Income tax, would this mean we are no longer limited by the usual 40% on income and in future only pay 38.1% on any dividends above £42k income?

[BrilloPad]

You're reappearance, divine as it is, has not lessened the sting of this budget Heck of a lot to work out here.

Indeed. When IR35 was first announced it was all so simple. You could not go from permie to contractor in the same company.

This dividend thing could get very messy.

Question is, for those of us taking salary and dividends, how much extra will we pay?

[SallyAnne]

WTF!

She lives!

Missed you too Pondy

[administrator]

https://twitter.com/hmtreasury/statu...55379191808000

My guess is we are in the 15%

[Underbase]

What are the bands for those rates? I didn't catch it. And will they also then be taxed additionally with income tax?

Quick and dirty calculation (lots of assumptions about how it will work).

If you took 8060 (for simplicity) and then the rest of the lower band in divs (34325) you take home being

42385. It would cost zero in income tax as the salary is below the tax free allowance and the rest is already paid for by the company tax / div tax credit.

Total gross in the LTD needed to distribute this much. 49250.

Same idea 8060, and max in divs for lower rate is

8060 + 5000 of tax free divs, and that leaves 29325. So you would have to pay 7.5% on that which is £2199 in tax. LTD would have to earn same amount.

Of course this doesn't include all the tax bands moving and the lower tax band as well, it is merely to show the effect of the div tax as I would see if working.

[TheFaQQer]

Hi everyone

Bloody hell!

I thought you were dead, like

[rl4engc]

Dividends aside, I'm liking the "Benefits Bonfire" vibe, it's been a lifestyle choice for some for far too long IMHO.

[VectraMan]

But he's also going to be reducing CT, so that'll give some of you tax avoiding scum some of your free cash back.