Originally posted by chopper
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Reply to: Dividends for 2016-17
Collapse
You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:
- You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
- You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
- If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.
Logging in...
Previously on "Dividends for 2016-17"
Collapse
-
Last edited by Contractor UK; 28 March 2017, 11:45.
-
Originally posted by malvolio View PostWell CT is 20% and NICs are (13.8 + 2)% (I think, without looking it all up) so it look like salary is more efficient. But ICBW...
NICs on £11k Salary would be £353 for employee NICs, plus £399 employer NICs. (unless you get employment allowance).
Corp Tax on that £2940 would be £588.
So I guess the answer is if you qualify for Employment Allowance, then take £11k salary. If not, then take £8060 salary.
Leave a comment:
-
Originally posted by smileyface View PostAccording to this article:
Dividend tax (rules 2016/17 on)
it states the following:
"2016/17 example: the dividend allowance is within your basic rate tax band
If you are a basic rate taxpayer, and you receive all your taxable income in dividends you will be up to £2,025 worse off.
The basic rate tax threshold for 2016/17 is £43,000 (personal allowance of £11,000, plus basic rate tax band of £32,000)
If a dividend of £32,000 is received it is taxable as follows, breaking it down into the different "slices":
The first £5,000 - covered by your dividend allowance
The next £27,000 (the remainder of your basic rate band) - taxed at the new 7.5% = £2,025 tax due."
Suppose my salary is only £8,060. I take £5,000 as dividends. Does that mean I can take a further £29,940 (as opposed to only £27,000) and have that taxed at 7.5%?
Thanks
Leave a comment:
-
What I can't be bothered working out is what the NICs are on that £2940 compared to the corporation tax.
Leave a comment:
-
Originally posted by chopper View PostYou would have £8060 of Salary at 0% tax
Then £2940 of Dividends at 0% tax
Then another £5000 of Dividends at 0% tax
Then the remaining £27,000 at 7.5% dividend tax.
The difference, therefore, in paying £8060 salary + £34940 dividends compared to £11000 salary + £32000 are a) the Employer and Employee NICs on the £2940 extra salary or b) Corporation Tax at 20% on an extra £2940 (given you get CT relief on salary, but not dividends).
What I can't be bothered working out is what the NICs are on that £2940 compared to the corporation tax.
Leave a comment:
-
Woo-hoo.. A numbers thread we haven't ballsed up multiple times!!!
Leave a comment:
-
Originally posted by smileyface View PostSuppose my salary is only £8,060. I take £5,000 as dividends. Does that mean I can take a further £29,940 (as opposed to only £27,000) and have that taxed at 7.5%?
You would have £8060 of Salary at 0% tax
Then £2940 of Dividends at 0% tax
Then another £5000 of Dividends at 0% tax
Then the remaining £27,000 at 7.5% dividend tax.
The difference, therefore, in paying £8060 salary + £34940 dividends compared to £11000 salary + £32000 are a) the Employer and Employee NICs on the £2940 extra salary or b) Corporation Tax at 20% on an extra £2940 (given you get CT relief on salary, but not dividends).
What I can't be bothered working out is what the NICs are on that £2940 compared to the corporation tax.
Leave a comment:
-
Dividends for 2016-17
According to this article:
Dividend tax (rules 2016/17 on)
it states the following:
"2016/17 example: the dividend allowance is within your basic rate tax band
If you are a basic rate taxpayer, and you receive all your taxable income in dividends you will be up to £2,025 worse off.
The basic rate tax threshold for 2016/17 is £43,000 (personal allowance of £11,000, plus basic rate tax band of £32,000)
If a dividend of £32,000 is received it is taxable as follows, breaking it down into the different "slices":
The first £5,000 - covered by your dividend allowance
The next £27,000 (the remainder of your basic rate band) - taxed at the new 7.5% = £2,025 tax due."
Suppose my salary is only £8,060. I take £5,000 as dividends. Does that mean I can take a further £29,940 (as opposed to only £27,000) and have that taxed at 7.5%?
ThanksTags: None
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Spot the hidden contractor Dec 20 10:43
- Accounting for Contractors Dec 19 15:30
- Chartered Accountants with MarchMutual Dec 19 15:05
- Chartered Accountants with March Mutual Dec 19 15:05
- Chartered Accountants Dec 19 15:05
- Unfairly barred from contracting? Petrofac just paid the price Dec 19 09:43
- An IR35 case law look back: contractor must-knows for 2025-26 Dec 18 09:30
- A contractor’s Autumn Budget financial review Dec 17 10:59
- Why limited company working could be back in vogue in 2025 Dec 16 09:45
- Expert Accounting for Contractors: Trusted by thousands Dec 12 14:47
Leave a comment: