Higher Tax Band/Salary confusion

[Waldorf]

This might help?

https://www.nixonwilliams.com/dividend_calculator.asp

[MarillionFan]

Well it's the combination - firstly the savings on NI. Secondly the ability to control how much you are paid and simply roll over to the next year hence avoiding the higher tax. Actually the key above both is expenses. Mileage, travel, Computer equipment etc.

WHS

It's not necessarily about the higher tax breaks. It's all about how you 'minimise' your tax.

[TheFaQQer]

Mine does

I had to wait nearly an hour for mine to work out what I could take as a dividend and let me know.

I'll let her off since it's the tax return season (and I did get emails back quickly on Sunday when I sent them )

[northernladuk]

He doesn't respond in 9 minutes.

Mine does

[NorthWestPerm2Contr]

??? The difference between permie and contractor in the bands being talked about here are not huge. It is the higher bands that makes the difference IMO.

Well it's the combination - firstly the savings on NI. Secondly the ability to control how much you are paid and simply roll over to the next year hence avoiding the higher tax. Actually the key above both is expenses. Mileage, travel, Computer equipment etc.

[Old Greg]

Is your accountant not the best first contact for this?

He doesn't respond in 9 minutes.

[northernladuk]

Cool. Why anybody would want to be permie is beyond me!

??? The difference between permie and contractor in the bands being talked about here are not huge. It is the higher bands that makes the difference IMO.

[NorthWestPerm2Contr]

2011-12.

Allowance = 7475, 20% band = 0-35,000 of TAXABLE income.

Your salary is 7225. So in your case you can receive 35,250 of gross dividends (including tax credit) this is 31725 of net dividends.

This assumes you own personal allowance is the standard 7475.

[747l will actually give you 7479 in allowances, so you could have 35,254 = 31,728.60].

Cool. Why anybody would want to be permie is beyond me!

[ASB]

2011-12.

Allowance = 7475, 20% band = 0-35,000 of TAXABLE income.

Your salary is 7225. So in your case you can receive 35,250 of gross dividends (including tax credit) this is 31725 of net dividends.

This assumes you own personal allowance is the standard 7475.

[747l will actually give you 7479 in allowances, so you could have 35,254 = 31,728.60].

[NorthWestPerm2Contr]

figured it out - thanks guys

[MichaelSJD]

HMRC's website is quite good for detailing the different bands:

Income Tax : HM Revenue & Customs: Income Tax allowances

NI: HM Revenue & Customs: National Insurance Contributions

I hope this helps.

Regards

Michael

[LisaContractorUmbrella]

HM Revenue & Customs: Taxes, National Insurance and Stamp Taxes

HTH

[northernladuk]

Is your accountant not the best first contact for this?

[NorthWestPerm2Contr]

I am trying to calculate how much more dividends I can take before April but am getting confused when trying to find out the allowances. I am paying myself below the PAYE limit (7225). Then a calculator tells me I can earn a further 35,000 (i.e. aprox £31,250 net dividend). Can somebody clarify all the tax bands or point me to a site which displays it clearly (everything I have been on so far is just confusing).