Calculating tax efficient dividend
My total "taxable pay" for the 2011/2012 tax year is £28,212.36. (I've already had my paycheck dated 31/03/2012 so this is figure is certain).
I run a side business as a Ltd company so I need to know how much dividend I can take without hitting the 40% income tax bracket. My accountant has told me to take a £5k dividend (i.e. BACS £5k from company account to personal account before year-end). I expressed surprise that £5k is a very round number but he held firm.
Firstly please could you tell me what the correct figure is for the dividend (i.e. the amount of the BACS transfer) as I think he's being massively conservative? (I don't have any extra income sources other than the "taxable pay" above and this one-off dividend)
Secondly should I be looking for a new accountant or is his advice reasonable?