I've started to think about the salary and dividend mix for small company directors after 6 April next year and it's clearly not an easy answer any more.
It's certainly going to require a lot more consideration of individuals circumstances and anticipated company profits, and a lot more work.
Anyone given it much consideration yet?
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I think accountants have got lazy.
Many seem to have no concept of tax planning beyond the current salary / dividend mix.
I think it's a great time for the industry as I hope it will weed down many of the incompetents.
Exactly!
Obviously we will all have to endure the endless "what is the magic formula please" threads.
I do think that you are confusing cause with effect cheekychappy. It is not that accountants have become lazy people. It is the other way around.
It's just as well that none of the contributors to this site are incompetent, or lazy, or both!
Is it complicated?
I'll be sticking to the £671 per month formula since the primary threshold has been frozen and it's imperative that clients don't lose a year's state pension contribution entitlement. In month 12 I'll be giving each director the option (as I did this year) of topping up to the personal allowance. Subject to the availability of the employers allowance and whether the company qualifies under the new 16/17 regime there is a small profit to be made whereby the corporation tax saving exceeds the national insurance in month 12.
I've seen no evidence yet that a change from dividends to salary is required but since directors' tax calculations are cumulative there's plenty of time to change course. What will be done in the relatively quiet period in February is a review of spouse's involvement in each company.