Dividend Tax

TheCyclingProgrammer

Just read this and educate yourself a bit:
https://jf-financial.co.uk/2018/01/09/tax-dividends-2018-19/

00ec25

solidpro wrote: »

Your understanding is flawed. Is it better to:

Take £11800 salary and pay £420 in NI, or

Take £8424 in salary and an extra £3376 in dividends, but pay £253.20 in dividend tax and £641.44 in corporation tax *before* issuing the dividend?

I'd rather take home £11380 than £10905.36

it is better to understand what is being said before replying, or you just come across as solid rather than merely with a flawed understanding

solidpro

Taking the full personal allowance would indeed save you £791 in corporation tax but will cost you £411 in employee’s NI (deducted from your salary) and a further £472 or so in employer’s national insurance on top of this. The employer’s NI will save you a further £89 in corporation tax making the total cost of this option being £801.

£10? a-maz-ing.

Thanks everyone. much love.

TheCyclingProgrammer

solidpro wrote: »

£10? a-maz-ing.

Thanks everyone. much love.

The other difference of course being, that you end up with about £400 more in your pocket with the lower salary, higher dividends route, as well as the overall (albeit small) net tax difference, because it’s the company that pays the extra corporation tax rather than you the employee paying the national insurance.