Salary v dividends

[SimonMac]

In the new tax year starting April 2016, the personal allowance goes up to £11,000,meaning anything earned up to the amount is exempt from Income Tax.

Also from April 2016, the first £5,000 of dividends is free of any tax.

If I choose NOT to take a salary, can that £11,000 be regarded as an additional tax free dividend, ie can I take a total of £5,000 + £11,000 = £16,000 as dividends and not pay any tax on it?

What ever salary you take will reduce your Corp Tax bill (if you don't pay CT then there is nothing wrong with your plan)

[VectraMan]

Calm down everybody. He was just asking how the allowances work.

Example 3
“I have a non-dividend income of £6,500, and a dividend income of £12,000 from shares outside of an ISA”

With a Personal Allowance of £11,000, £4,500 of the dividends are under the threshold for tax. A further £5,000 comes within the Dividend Allowance, leaving tax to pay at Basic Rate (7.5%) on £2,500.

https://www.gov.uk/government/public...ance-factsheet

Unless I'm very much mistaken that makes the answer YES.

Though you're still better off not doing it that way because of CT.

[jbond007]

Whoa, calm down guys. You're turning this into mumsnet for contractors. To the OP, SimonMac & Vectra have given you the correct answers. Hope your don't get turned away from the forum because of the tone of others

What I don't get is for the CUK regulars is if it feels like a repeat question, why not just ignore it ?

[AtW]

Whoa, calm down guys. You're turning this into mumsnet for contractors.

That's what General has always been

[FatLazyContractor]

Whoa, calm down guys. You're turning this into mumsnet for contractors. To the OP, SimonMac & Vectra have given you the correct answers. Hope your don't get turned away from the forum because of the tone of others

What I don't get is for the CUK regulars is if it feels like a repeat question, why not just ignore it ?

I understand your pain. These people like AtW etc are winkers of the highest order.

I'd suggest that you PM those sane posters like NorthernladUK or MarillionFan. They do have a lot of experience in such matters.

Hope that helps

[FatLazyContractor]

That's what General has always been

Was this how they trained you in Moscow to behave with 007 ?

[AtW]

Was this how they trained you in Moscow to behave with 007 ?

They did not train me to behave, they trained me to kill...

[MarillionFan]

They did not train me to behave, they trained me to sit on the sofa in my bedsit and eat crisps....

Ftfy

[DimPrawn]

They did not train me to behave, they trained me to sit on the sofa in my bedsit and have a Pot Noodle...

FTFY