Salary vs dividends with employment allowance

ukri

I am the sole director of a ltd company and have one employee (started this financial year) who is paid £9000 a year. This qualifies the company to use the £4000 employment allowance for employers NI.

I have new property income of about £15,000 which more than uses up my nil-rate band , tax-free dividend allowance of £2000 and would like to extract no more than another £33,000 in income from the company, staying within the basic rate band.

With this background (especially keeping in mind that there would be no Employers NI due to the EA), I would be grateful if someone could tell me if it would be tax efficient to

- take out all of the remaining £33,000 in salary

- take out ~£9k salary and rest as dividends

-or is there a more tax-efficient salary-dividend split than that

I would be very grateful for any thoughts at all, even if it were to point out a basic error that I’ve made!

TIA.

Dazed_and_C0nfused

I have new property income of about £15,000 which more than uses up my nil-rate band , tax-free dividend allowance of £2000 and would like to extract no more than another £33,000 in income from the company, staying within the basic rate band.

Possibly just wording but how does personal property income use up the dividend nil rate band (it's not actually an allowance)?

The basic rate threshold has recently increased to £50,270 - should that replace the £50,000 you appear to have used?

ukri

Apologies. I’m not very clued up on the wording. I think what I should have said is that

- the 15k property income exhausts my personal allowance of £12,570

- the 2k dividend allowance (I’m just using the phrase I see on the HMRC page)

So assuming (for ease) a 50k basic rate threshold which I don’t want to cross, that leaves another 33k to extract from the company.

I hope that’s a bit clearer? Thanks 

Jeremy535897

Try googling salary v dividends calculator.