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Reply to: NI and thresholds etc
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Previously on "NI and thresholds etc"
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Guys n gals... The OP has asked his accountant and not understood. He's read a clear link and it's still not sunk in. Can we stop posting links and give him an answer he can understand, preferably as short and concise as possible... Something like yes or no. :
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Originally posted by northernladuk View PostInteresting and pretty clear (dunno about accurate) guide on the figures for next year including new divi tax here...
Best Directors Salary and Dividend Levels 2016/17 - JF Financial : Accountants
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Originally posted by TheFaQQer View Posthttps://www.gov.uk/government/public...ance-factsheet
There are some good examples there to get your head round it.
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Originally posted by psychocandy View Postseems to indicate its zero on this first £5000? Thats not right is it? If that was the case you'd 'save £1000 on that first £5000 and not be "down" until you paid out £13333 dividend.
There are some good examples there to get your head round it.
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Originally posted by TheFaQQer View PostNot according to the expert I was talking to about it.
I may have confused "alphabet" and "preference" though - one is and one isn't.
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Originally posted by The Spartan View PostAren't the use of alphabet shares a whole world of hurt? Especially if HMRC come knocking?
I may have confused "alphabet" and "preference" though - one is and one isn't.
Edit - no, I was right first time. Alphabet shares, fine; preference shares not fine.
Edit 2 - this could be particularly useful if you have a partner with low / no dividend income. Because they can get £5k tax free even if they are a 40% tax payer.Last edited by TheFaQQer; 11 February 2016, 14:46.
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Originally posted by TheFaQQer View PostAnd if you had an alphabet share for your wife that paid a dividend at a different rate, then you could pay them £5k (minus any other dividend income) and that would be tax free too.
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Originally posted by The Spartan View PostYou mean divi tax right?
Well work it out 32k divi's @ 7.5% = £2,400
Where as 27k divi's @7.5% = £2,025
So you don't pay any tax on the first 5k after the personal allowance.
(yourco already paid 20% corporation tax on it - you needed to make £6250 profit to distribute that £5000 dividend)
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Originally posted by The Spartan View PostYou mean divi tax right?
Well work it out 32k divi's @ 7.5% = £2,400
Where as 27k divi's @7.5% = £2,025
So you don't pay any tax on the first 5k after the personal allowance.
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Originally posted by psychocandy View PostAh but is it totally tax free as in no CT for the first £5K or just as before but without the extra 7.5%
Well work it out 32k divi's @ 7.5% = £2,400
Where as 27k divi's @7.5% = £2,025
So you don't pay any tax on the first 5k after the personal allowance.
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Originally posted by The Spartan View PostThe first 5k doesn't attract the dividend tax so it's:
11K Personal Allowance
5k divi's @ 0%
27k divi's @ 7.5% = £2025 tax payable to HMRC
Total £43k
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Originally posted by The Spartan View Postso you're a sheep then? You are allowed to ask questions, especially when you're paying for their expert advice.
Or is it you're just looking to get a rise out of NLUK?
I have asked them and they have explained but I am a bit dull :-)
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Originally posted by psychocandy View PostNice on NLUK. Useful post for once :-)
One thing which I may have got wrong in my head. The first £5K. I assumed this was taxed as normal? i.e. as we do now. And only anything ABOVE £5K accrued the extra 7.5% on top.
But this bit in that article:-
A new dividend allowance has been introduced which means that an individuals first £5,000 of dividends are tax free.
seems to indicate its zero on this first £5000? Thats not right is it? If that was the case you'd 'save £1000 on that first £5000 and not be "down" until you paid out £13333 dividend.
11K Personal Allowance
5k divi's @ 0%
27k divi's @ 7.5% = £2025 tax payable to HMRC
Total £43k
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Originally posted by psychocandy View PostHey spartie butti !!!! I just follow what my accountant recommends!
Or is it you're just looking to get a rise out of NLUK?
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Originally posted by northernladuk View PostInteresting and pretty clear (dunno about accurate) guide on the figures for next year including new divi tax here...
Best Directors Salary and Dividend Levels 2016/17 - JF Financial : Accountants
One thing which I may have got wrong in my head. The first £5K. I assumed this was taxed as normal? i.e. as we do now. And only anything ABOVE £5K accrued the extra 7.5% on top.
But this bit in that article:-
A new dividend allowance has been introduced which means that an individuals first £5,000 of dividends are tax free.
seems to indicate its zero on this first £5000? Thats not right is it? If that was the case you'd 'save £1000 on that first £5000 and not be "down" until you paid out £13333 dividend.
Leave a comment:
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