Dividends beyond £5k taxed wef 2016!!

[NorthWestPerm2Contr]

Cheers for the reply. Maybe that's my confusion, I saw someone earlier post about the fact they'd already paid out the whole dividend premium for the year and were worried about the extra tax implications.

So what you're saying is if my company pays me my dividend before April then there is no further tax to pay?

That is correct, make sure to take every dividend possible to the penny and split with Mrs if you have one. Next year you will be getting raped so prepare yourself.

[SpontaneousOrder]

That is correct, make sure to take every dividend possible to the penny and split with Mrs if you have one. Next year you will be getting raped so prepare yourself.

All I need after having been mildly sodomised this morning when my lawnmower broke.

Preparing for full-on human-centipede when expense relief is stopped.

Clearly Obsorne is a terrorist.

[mudskipper]

That is correct, make sure to take every dividend possible to the penny and split with Mrs if you have one. Next year you will be getting mugged so prepare yourself.

FTFY.

Let's go with mugged.

[WordIsBond]

Hi all.

First post so good to get confirmation from any accountants on the forum but isn't anyone taking out dividends to the 20% tax limit better off now?

Eg.

In 2015/16
Salary £8052
Dividends £30899 = £34333 after 10% tax credit so you've hit the £42385 20% limit
Total take home pay = £8052 + £30899 = £38951

In 2016/17
Salary £8052
Dividends: £34648 available as no tax credits anymore which means £5k tax free and £29648 taxable at 7.5% = £27424
Total take home pay = £8052 + £5000 + £27424 = £40476

Unless I've incorrectly picked up that the tax credit is being abolished in favour of the new percentages.

Your numbers are mostly correct, but incomplete.

The cost to your company in 15/16 is £38951. The cost to your company in 16/17 is £42700. That extra £1500 take home comes at a cost of almost £4K to your company. If you needed the extra £1500 take home this year, it would only cost the company £2K rather than £4K.

[Platypus]

I've decided to jump right into this and am today taking additional dividends that will push me well in to higher rate tax

[d000hg]

Isn't £2k a year about the profit a typical contractor makes per year from the VAT FRS?

[gizzmo]

The new dividend tax: a simple case of double taxation - Telegraph

Article in the Telegraph today. Richard Evans is asking people to email with their opinions.

[AtW]

Torygraphs owners are allegedly based offshore so they will be ok...

[tractor]

...

Isn't £2k a year about the profit a typical contractor makes per year from the VAT FRS?

No, It's a tax saving that any small business can quite legitimately take advantage of.

Not all contractors do. I don't for one.

Serious point, I would be happy to take your 'holier than thou' comments when you post your accounts here and prove that you put your money where your mouth is i.e. pay voluntarily PAYE/Full EE and ER NI on your dividends or pay all your profit out as PAYE salary.

Until then, it's all hot air!