Liz
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Post by Liz on Oct 4, 2016 15:34:30 GMT
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stevio
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Post by stevio on Oct 4, 2016 16:23:50 GMT
The other employee doesn't necessarily have to be a director I presume you mean 22k salary, 2x11k? As the other person and I have tried to tell you, you can also make the decision to lower the salary so no NI is payable and vary it based on the level of savings income your trying to offset
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Post by gaspilot on Oct 4, 2016 16:29:15 GMT
I was using half of the dividend allowance in my calculation, but I now think I will get my own £5k allowance and not need to share it with the other director. So dividend tax will be £525(7K@7.5%), not £712.50(9.5K@7.5%) Just in case people think this is too good to be true, corporation tax would also be due on the company's income. The rate will depend upon the year end, but the 2016/7 rate is 19%.
- PM
I think the 19% rate is only available for ring-fenced companies (oil related, I believe). The corporation tax rate is still 20% for most companies.
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Post by gaspilot on Oct 4, 2016 16:35:01 GMT
Just in case people think this is too good to be true, corporation tax would also be due on the company's income. The rate will depend upon the year end, but the 2016/7 rate is 19%.
- PM
Unless you offshore  Yes of course Corporation Tax will have already been paid by the company, which is a separate legal entity. Bring on 17%. I think the reduction in corporation tax rates was an aspirational thing for George Osborne. The present incumbent might not be so generous sadly. I hope I'm wrong.
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Liz
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Post by Liz on Oct 4, 2016 16:56:48 GMT
The other employee doesn't necessarily have to be a director I presume you mean 22k salary, 2x11k? As the other person and I have tried to tell you, you can also make the decision to lower the salary so no NI is payable and vary it based on the level of savings income your trying to offset Point 1, correct Point 2, yes £22k this year and £23k next Point 3, Paying 12% NI on the portion of income between LEL and Personal Allowance is far better than paying 20% corporation tax on it AND 7.5% dividend tax to withdraw it(assuming EA, without EA, it's marginal)
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fp
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Post by fp on Oct 4, 2016 17:31:19 GMT
The other employee doesn't necessarily have to be a director I presume you mean 22k salary, 2x11k? As the other person and I have tried to tell you, you can also make the decision to lower the salary so no NI is payable and vary it based on the level of savings income your trying to offset Point 1, correct Point 2, yes £22k this year and £23k next Point 3, Paying 12% NI on the portion of income between LEL and Personal Allowance is far better than paying 20% corporation tax on it AND 7.5% dividend tax to withdraw it(assuming EA, without EA, it's marginal)Which is exactly why I opted for 11k salary, see my earlier post. I think the difference is about £300 per year, which is the same as squirrelling your maximum allowance into a santander 123 account (working on the old rates)
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stevio
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Post by stevio on Oct 4, 2016 17:40:35 GMT
The other employee doesn't necessarily have to be a director I presume you mean 22k salary, 2x11k? As the other person and I have tried to tell you, you can also make the decision to lower the salary so no NI is payable and vary it based on the level of savings income your trying to offset Point 1, correct Point 2, yes £22k this year and £23k next Point 3, Paying 12% NI on the portion of income between LEL and Personal Allowance is far better than paying 20% corporation tax on it AND 7.5% dividend tax to withdraw it(assuming EA, without EA, it's marginal) Point 3, correct
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Post by propman on Oct 5, 2016 9:36:26 GMT
Unless you offshore Yes of course Corporation Tax will have already been paid by the company, which is a separate legal entity. Bring on 17%. I think the reduction in corporation tax rates was an aspirational thing for George Osborne. The present incumbent might not be so generous sadly. I hope I'm wrong. I think you'll find that the 19% applies to all UK companies from 1 April 2017. This was in the 2015 Finance Act, HMRC website shows the proposal but hasn't been updated for the actual change.
Re the rate, obviously nothing in politics is certain, but Theresa May was talking about an aspiration for a 15% CT rate, with 17% applying for periods from 1 April 2020 has now also been enacted, so it would be difficult to rescind the 19% rate just now.
Regards
PM
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