Because OP does not understand how basic rate allowance operates is my understanding.
OP has made a decision based on best mates opinions and online MVL company.
He was not looking for any difference of opinion, and most accountants (me included) always look for options that work and give client the choice of options.
We have a client that has chosen to spread dividends over years as a matter of principle.
Start by gathering information from forums/Internet and then identifying a accountant is not uncommon
£10000 div year 1 tax £600
£10000 div year 2 tax £600
£2000 div year 3 tax £0
£13000 informal strike off tax £0, Co House fee £8
How can it be 600 on 10000?
The higher tax payer rate is 32%?
32½%, actually.
But you're not a higher rate taxpayer. Unless there's something you've not told us.
I did tell. I have a normal employment with 40k salary, so I would have used all my allowance by that employment. So any pound of dividendd I will be withdrawing will be taxed at 32%
Thank you.
I believe that mvl is better in my situation as I save minimum (40*0.32% -40*10%) 8k less mvl fee of 3k. Net 5k.
Still good for me
Even if I withdraw 40k over next few years thru will all be taxed at higher rate of 32% due to my normal employment, so no use to me.
Only 2k free divedent per year
Thank you for your detailed response
I am curious how could it be 1800 if I would pay 30% on dividends even if I withdraw within 2 or more years as I would already be receiving employment income of 40k a year
My answers
I am not that horrible. Need an accountant specifically for the stage I am at going into mvl.
A yway, thanks everyone for all comments
Start by gathering information from forums/Internet and then identifying a accountant is not uncommon
I did tell. I have a normal employment with 40k salary, so I would have used all my allowance by that employment. So any pound of dividendd I will be withdrawing will be taxed at 32%
How can it be 600 on 10000?
The higher tax payer rate is 32%?
Thank you.
I believe that mvl is better in my situation as I save minimum (40*0.32% -40*10%) 8k less mvl fee of 3k. Net 5k.
Still good for me
Even if I withdraw 40k over next few years thru will all be taxed at higher rate of 32% due to my normal employment, so no use to me.
Only 2k free divedent per year
Thank you for your detailed response
I am curious how could it be 1800 if I would pay 30% on dividends even if I withdraw within 2 or more years as I would already be receiving employment income of 40k a year
Mvl company quoted 3k max so it a way cheaper then paying tax on dividends..
Could you clarify why MVL will not be beneficial?
30% if I withdraw as a dividend is higher then any capital gains tax rate...
Yes, correct. I am aware.
I would earn 40k in my new employment as an employee. So my 35 k will be taxed at 30% as opposed to 10% after mvl