These new fangled rules are a minefield, I would appreciate if you could look through my calculations and see if any glaring over-sights before I send to client (2 director/shareholders). They are currently taking a net £8000 salary, I am looking at the savings of taking £4000 net salary and dividend sufficient to leave them £4000 after accruing tax to be paid on tax return.
Curent position:
Gross |
13431.91 |
|||
Tax |
2666.67 |
20% |
533.33 |
|
9833.33 |
40% |
3933.33 |
||
931.91 |
45% |
419.36 |
4886.02 |
|
NI |
545.89 |
|||
8000.00 |
||||
Company NI |
1760.32 |
|||
Total personal tax and NI |
5431.91 |
|||
Cost to company £15192.23 less CT relief £12153.78 |
||||
Position from above proposal:
Salary |
6455.43 |
||||||
Tax |
2666.67 |
20% |
533.33 |
||||
3788.76 |
40% |
1515.50 |
2048.83 |
||||
NI |
406.60 |
||||||
4000.00 |
|||||||
Company NI |
737.56 |
||||||
Dividend |
416 |
0% |
0 |
416 |
|||
5309 |
32.50% |
1725 |
3584 |
||||
5725 |
1725 |
4000 |
|||||
Tax to pay on Tax Return |
1725 |
||||||
Total personal tax and NI |
4180.43 |
||||||
Cost to company - £12917.99 (6455.43+737.56+5725) less CT relief on salary only ((6455.43+737.56)x 20% = £1438.60) = £11479.39 |
|||||||
Any one see any flaws, errors or omissions?So company would save £674.39 each per month and directors would save £1251.48 each per month but still end up with a net £8000
.
Replies (6)
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That's a mighty narrow 40% band you have there.
No NIC below £8060? Employer's Allowance?
Out of date rates of tax on dividends.