Originally posted by SparkyB
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they then add the restated PAYE to the new Dividend tax amounts/bands to calculate what tax you should have paid and then deduct the amount you actually paid back in Jan to work out what the loan charge will be.
So simply your dividends will end up in higher tax bands as they decide these bands after your loan amount is added to your existing small salary.
Here are the bands for your info
Tax Free £2000
Basic rate x 7.5%
Higher rate x 32.5%
Additional rate x 38.1%
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