We have hit April 2108 and I have a dilemma.
I went contract in Dec 17 after being permanent employee, between this time I did not pay myself a salary as a contractor as i already earned over the tax threshold in my previous employment, so after taking expenses back in March 2018 I took only a tax free dividend of £5k for that tax year which i believe was in my personal allowance.
However we are now in April 2018-April 2019 - my contract is coming to an end and i am looking to pay myself more dividends.
Problem is I'm going back to permanent employment and salary in next few months. around £60k and will enter the higher tax bracket
Therefore If i pay myself dividends from my company of £2000 tax free and say another £10,000 @7.5% tax before i start my paye job, - will later in the year when I'm earning about £60k as a paye employee - will this the force me to pay much more tax on the £10,000 dividend i though i was only going to pay 7.5% tax on.
Am i better to completely wind the company up, what would be the benefits and down sides of this?
Any ideas? Anything on web i can find on this only talks about dividends as a contractor being in certain thresholds , ans assumes you will continue to be a contractor.I cant find much on the implications of going back the way from contractor to paye in the same tax year.
Regards
Alan
I went contract in Dec 17 after being permanent employee, between this time I did not pay myself a salary as a contractor as i already earned over the tax threshold in my previous employment, so after taking expenses back in March 2018 I took only a tax free dividend of £5k for that tax year which i believe was in my personal allowance.
However we are now in April 2018-April 2019 - my contract is coming to an end and i am looking to pay myself more dividends.
Problem is I'm going back to permanent employment and salary in next few months. around £60k and will enter the higher tax bracket
Therefore If i pay myself dividends from my company of £2000 tax free and say another £10,000 @7.5% tax before i start my paye job, - will later in the year when I'm earning about £60k as a paye employee - will this the force me to pay much more tax on the £10,000 dividend i though i was only going to pay 7.5% tax on.
Am i better to completely wind the company up, what would be the benefits and down sides of this?
Any ideas? Anything on web i can find on this only talks about dividends as a contractor being in certain thresholds , ans assumes you will continue to be a contractor.I cant find much on the implications of going back the way from contractor to paye in the same tax year.
Regards
Alan
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