Originally posted by SandyD
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Previously on "Take Higher Threshold Dividend Versus Director's Loan"
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Originally posted by SandyD View PostNope but am getting there...
would you believe it I'v been working at finance/banking projects for the last 15 years
But always left it to my accountant, now I am trying to get my head round it... so there..
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Originally posted by northernladuk View PostYou know you are legally responsible for your finances don't you? You have to sign off what he does at the end of it all? You should be sitting down and speaking to him about all this, it is what you pay him for and he knows your accounts, we don't.
I don't see the relevance between working on a banking project and your companys accounts.
Thanks again Martin
NLUK Am not ashamed to ask a question if I didn't know the answer, if that bothers you then that's your problem you <snip>Last edited by administrator; 1 March 2013, 12:51. Reason: No winking in the professional forums please :o)
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Originally posted by SandyD View PostNope but am getting there...
would you believe it I'v been working at finance/banking projects for the last 15 years
But always left it to my accountant, now I am trying to get my head round it... so there..
I don't see the relevance between working on a banking project and your companys accounts.
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Originally posted by jamesbrown View PostNet, yes. It isn't clear if SandyD understands that important difference.....
would you believe it I'v been working at finance/banking projects for the last 15 years
But always left it to my accountant, now I am trying to get my head round it... so there..
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Originally posted by jamesbrown View PostNet, yes. It isn't clear if SandyD understands that important difference.....
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Originally posted by stek View Post31488 divs surely?
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Originally posted by RTB View Post
Does anyone know how common this is , and whether this does work out any cheaper in the long run than paying the 30% dividend tax on higher earnings?
RTB
Wish people would ask their accountants how to run their finances and not other contractors in the office.
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Take Higher Threshold Dividend Versus Director's Loan
Originally posted by SandyD View PostHi Martin, many thanks for the help, am a bit dyslexic when it comes to the accounting parts. So you are saying if I am taking the £7,488 salary (which I am) and then £34,987 divs, assuming no other income/ the usual individual allowance, I would be paying corporation tax of £7,872, but no personal tax on top?
Thanks for you patience
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Originally posted by SandyD View PostHi Martin, many thanks for the help, am a bit dyslexic when it comes to the accounting parts. So you are saying if I am taking the £7,488 salary (which I am) and then £34,987 divs, assuming no other income/ the usual individual allowance, I would be paying corporation tax of £7,872, but no personal tax on top?
Thanks for you patience
No problem at all
Assuming you have no other taxable income such as bank interest, property income etc. then yes, there would be no personal tax due!
Martin
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Originally posted by Martin at NixonWilliams View PostHi SandyD,
Unfortunately, it is impossible to say! It depends on the profitability of your company and the mix of salary/dividends that makes up the £42,475.
Let us assume you earn precisely enough profit to pay a combination of salary and dividends up to £42,475, the salary being £7,488 (up to the NI threshold) and the remainder being in dividends. The tax would be as follows:
£46,848 Turnover
(£7,488) Salary
£39,360 Pre-tax profit
(£7,872) Corporation Tax
£31,488 Profit available for dividends
£31,488 in net dividends is £34,987 gross, this plus the salary of £7,488 takes you to £42,475. There is NO tax payable on the salary or the dividends. The only tax payable in this scenario is therefore the £7,872 in Corporation Tax.
It is ever as straightforward as this as there are many other things to consider, namely expenses, additonal turnover from flat rate scheme, spouses allowances if available, previous or other earnings, etc. etc.
I hope this helps.
Martin
Hi Martin, many thanks for the help, am a bit dyslexic when it comes to the accounting parts. So you are saying if I am taking the £7,488 salary (which I am) and then £34,987 divs, assuming no other income/ the usual individual allowance, I would be paying corporation tax of £7,872, but no personal tax on top?
Thanks for you patience
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Originally posted by SandyD View PostApologies to ask this question but: if I take £42,475 a year as divs i.e. £3539.58 per month, how much company tax do I pay and how much personal tax would I be paying?
Unfortunately, it is impossible to say! It depends on the profitability of your company and the mix of salary/dividends that makes up the £42,475.
Let us assume you earn precisely enough profit to pay a combination of salary and dividends up to £42,475, the salary being £7,488 (up to the NI threshold) and the remainder being in dividends. The tax would be as follows:
£46,848 Turnover
(£7,488) Salary
£39,360 Pre-tax profit
(£7,872) Corporation Tax
£31,488 Profit available for dividends
£31,488 in net dividends is £34,987 gross, this plus the salary of £7,488 takes you to £42,475. There is NO tax payable on the salary or the dividends. The only tax payable in this scenario is therefore the £7,872 in Corporation Tax.
It is ever as straightforward as this as there are many other things to consider, namely expenses, additonal turnover from flat rate scheme, spouses allowances if available, previous or other earnings, etc. etc.
I hope this helps.
Martin
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Originally posted by SandyD View PostApologies to ask this question but: if I take £42,475 a year as divs i.e. £3539.58 per month, how much company tax do I pay and how much personal tax would I be paying?
How the fsck would we know? The question has nothing to do with company tax at all. for personal tax we would need to know your personal allowances an dany other earned income you may have.
Or you could ask your accountant to work it out for you. You do have an accountant... Please tell us you have an accountant...
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