Changes to Dividend taxation
Discussion
TheHound said:
HoHoHo said:
So can I assume that starting and running a company having employees paying their way and paying my way in society with all of the agro et al whilst taking dividends on a monthly basis I may as well be better off now getting a job on PAYE?
I'm sure my accountant will provide more details and offer advice however it seems those that take a chance are being well and truly kicked in the balls.
I too am pissed off with this, however we still pay less tax than our PAYE counterparts. I'm sure my accountant will provide more details and offer advice however it seems those that take a chance are being well and truly kicked in the balls.
TheHound said:
Don't forget to factor in taking some salary (15/16- £10.6k and 16/17- £11k) (you will have some NI to pay but it'll be fairly minimal) Doing this, total tax for 15/16 will be £29,120 and for 16/17 will be £31,885. Obviously still a difference between the old system and the new but there is still a saving compared with your above example.
The tax free allowance is already factored into those calculations.Edited by TheHound on Wednesday 8th July 22:03
HoHoHo said:
So can I assume that starting and running a company having employees paying their way and paying my way in society with all of the agro et al whilst taking dividends on a monthly basis I may as well be better off now getting a job on PAYE?
I'm sure my accountant will provide more details and offer advice however it seems those that take a chance are being well and truly kicked in the balls.
You could get a job on PAYE with the company that currently pays you dividends?I'm sure my accountant will provide more details and offer advice however it seems those that take a chance are being well and truly kicked in the balls.
desolate said:
HoHoHo said:
So can I assume that starting and running a company having employees paying their way and paying my way in society with all of the agro et al whilst taking dividends on a monthly basis I may as well be better off now getting a job on PAYE?
I'm sure my accountant will provide more details and offer advice however it seems those that take a chance are being well and truly kicked in the balls.
You could get a job on PAYE with the company that currently pays you dividends?I'm sure my accountant will provide more details and offer advice however it seems those that take a chance are being well and truly kicked in the balls.
Sonic said:
TheHound said:
Don't forget to factor in taking some salary (15/16- £10.6k and 16/17- £11k) (you will have some NI to pay but it'll be fairly minimal) Doing this, total tax for 15/16 will be £29,120 and for 16/17 will be £31,885. Obviously still a difference between the old system and the new but there is still a saving compared with your above example.
The tax free allowance is already factored into those calculations.and on the 16/17 example you can effectivley get 16k tax free if you take 11k salary to use your personal allowance and then the first 5k divs as your tax free dividend allowance. The orignal calculation didn't factor in either of these points.
I was going to do a breakdown but just take a look at this link.
http://www.uktaxcalculators.co.uk/dividend-vs-sala...
TheHound said:
I was going to do a breakdown but just take a look at this link.
http://www.uktaxcalculators.co.uk/dividend-vs-sala...
Superb link!http://www.uktaxcalculators.co.uk/dividend-vs-sala...
This shows clearly that the change to taxation to small business owners is similar to the effect of a 2 or 3p rise in the basic rise in income tax!
EddieSteadyGo said:
TheHound said:
I was going to do a breakdown but just take a look at this link.
http://www.uktaxcalculators.co.uk/dividend-vs-sala...
Superb link!http://www.uktaxcalculators.co.uk/dividend-vs-sala...
This shows clearly that the change to taxation to small business owners is similar to the effect of a 2 or 3p rise in the basic rise in income tax!
Interestingly though, if you take £60,000 the increase is only £360.
Maybe it's time for a pay rise then.
£28600.00 of divi's for 2015/16 tax yr = £0.00 Tax
£28600.00 of divi's for 2016/17 tax yr = £1770.00 Tax (£3540.00 if your partner/wife etc takes an equal share of dividends)
http://www.uktaxcalculators.co.uk/dividend-tax-cal...
£28600.00 of divi's for 2016/17 tax yr = £1770.00 Tax (£3540.00 if your partner/wife etc takes an equal share of dividends)
http://www.uktaxcalculators.co.uk/dividend-tax-cal...
Edited by Phooey on Thursday 9th July 08:58
Company directors will just have to be a bit cleverer in defining what their withdrawals from their own companies relate to.
There may be some scope in increasing salary levels but at the same time making sure that the company makes use of the NI concession for small traders (this isn't an option for single director companies).
There may be some scope in increasing salary levels but at the same time making sure that the company makes use of the NI concession for small traders (this isn't an option for single director companies).
Eric Mc said:
Company directors will just have to be a bit cleverer in defining what their withdrawals from their own companies relate to.
Indeed.If over age 55 there is scope to pay to a pension scheme and draw that immediately, 25% would be tax free. The limit is £40,000 for the first tax year but £10,000 therafter.
Eric Mc said:
Company directors will just have to be a bit cleverer in defining what their withdrawals from their own companies relate to.
There may be some scope in increasing salary levels but at the same time making sure that the company makes use of the NI concession for small traders (this isn't an option for single director companies).
We were just discussing the single director company situation. Have you seen anything to indicate if it's a single director company 'with' employees that is being scooped up here accidentally?There may be some scope in increasing salary levels but at the same time making sure that the company makes use of the NI concession for small traders (this isn't an option for single director companies).
Nothing on that specific topic. I would advise listening to Radio 4 programmes like Money Box (Saturday - noon) or Money Box Live (Wednesday 3.00 pm) for general discussion on the Summer Budget. There was a Money Box live yesterday on covering the budget which will be available on iPlayer.
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