Salary for 2013/14

[Alan @ BroomeAffinity]

The government with RTI kicking in, could possibly be looking at contractors who are on the minimum and it may send alarm bells ringing. 

Wasn't this debated here a couple of weeks back? Are you seriously suggesting that there is a significantly increased chance of HMRC having an enquiry because the salary aspect is £7,000, not £12,000 (or whatever)?

[Wanderer]

Thanks for clarifying that, guys!

So as the director of the company with no contract of employment and a 944L tax code I should take £7,696 / £641.33 per month for 2013/14 (was £7488 / £624 per month for 2012/13) and this will mean that I keep my NI stamp up to date but don't have the admin of making PAYE payments.

My second question is presuming a £7,696 salary and no other income, what is the maximum dividend I can take for 2013/14 without hitting the higher rate tax limit?


Yes, I know I could ask my accountant but this is a question that lots of people will want to know the answer to and I'd like to discuss it here....

[Martin at NixonWilliams]

Thanks for clarifying that, guys!

So as the director of the company with no contract of employment and a 944L tax code I should take £7,696 / £641.33 per month for 2013/14 (was £7488 / £624 per month for 2012/13) and this will mean that I keep my NI stamp up to date but don't have the admin of making PAYE payments.

My second question is presuming a £7,696 salary and no other income, what is the maximum dividend I can take for 2013/14 without hitting the higher rate tax limit?


Yes, I know I could ask my accountant but this is a question that lots of people will want to know the answer to and I'd like to discuss it here....

Hi Wanderer,

That is correct, though make sure you are on the correct tax code as you could end up paying PAYE if it is incorrect!

The maximum dividend that can be taken is £30,378 (net), calculated as follows:

£41,450 - Higher rate threshold for 2013/14
(£7,696) - Salary for 2013/14
= £33,754 - Gross dividend available (£30,378 net).

The above assumes you do not have any other income - other sources of income such as rental property income or bank interest should be considered if your intention is to declare dividends up to the higher rate tax threshold.

I hope this helps.

Martin