Share this content
5

Choice between Dividends and Director's Loan

Work out the figure for the amount of  annual cost of ers NIC and dividend to fund the income tax

Didn't find your answer?

I was reading an article from an accountant website on choice between Dividends and Director's Loan. There was a table illustrating this point. However , I am not sure how they worked out the figure for the amount of  annual cost of ers NIC and dividend to fund the income tax. Please see the table link below:

https://www.pricebailey.co.uk/wp-content/uploads/2017/08/table2.jpg

 

Replies (5)

Please login or register to join the discussion.

avatar
By frankfx
13th May 2020 12:09

What are your workings ?
What difference do your workings reveal?

Thanks (0)
Replying to frankfx:
avatar
By sach36
13th May 2020 13:35

Hi frankfx ,

I could only think that the ers NIC would be on BIK -Loan Interest of £10,000*3%*13.8%=£41.40. I am not quite sure about annual cost of Dividends. This is for BR band taxpayer.

Thanks (0)
Hallerud at Easter
By DJKL
13th May 2020 14:39

Why are they using 3% anyway, for 2020/2021 the rate is surely 2.25%?

Thanks (0)
Replying to DJKL:
avatar
By sach36
13th May 2020 16:19

Hi DJKL,

The article is written in August 2017 and so the Loan interest BIK is 3% then.

Thanks (0)
By SteveHa
13th May 2020 15:00

I can't be bothered doing the maths, but if the employer is standing the personal tax then that of itself is a benefit in kind, grossed up for tax and NI.

EDIT: Oh, and what DJKL said.

Thanks (0)
Share this content

Related posts