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View Full Version : A reasonable balanced article on the Dividend and other tax changes



DaveB
26th August 2015, 09:37
In The Register.

Even the comments are fairly balanced and resonable. I suspect some denizens of CUK may be posting there already.

Are you a Tory-voting IT contractor? Congrats! Osborne is hiking your taxes (http://www.theregister.co.uk/2015/07/21/budget_hits_it_contractors/)

Zero Liability
26th August 2015, 11:04
This may be of interest too:

New dividend tax regime confirmed - Contractor Weekly (http://contractorweekly.com/contractor-news/tax-a-ir35-news/1203-https-www-gov-uk-government-publications-dividend-allowance-factsheet-dividend-allowance-factsheet)

Sausage Surprise
26th August 2015, 12:56
For us keeping under the 40% threshold with £10k salary does this mean the previous calcs we made have been understated?

eek
26th August 2015, 13:00
For us keeping under the 40% threshold with £10k salary does this mean the previous calcs we made have been understated?

Threshold is £42,700 for 16/17

so £10,000 salary gives you £32,700 in dividends of which £27,700 is taxed at 7.5% (or £2077.50 to pay)

so £42700 taken from the company will be £40622.50 in your pocket and cost the company including corporation tax £50875

d000hg
26th August 2015, 13:23
If CUK members are posting in the comments, I doubt they are balanced or reasonable. However, CUK members might view the comments as balanced and reasonable :)

northernladuk
26th August 2015, 13:45
Won't this all be irrelevant if we are by default inside IR35? :grin

eek
26th August 2015, 13:49
Won't this all be irrelevant if we are by default inside IR35? :grin

Yep but that's 2017 so my figures are still correct..

northernladuk
26th August 2015, 13:54
If CUK members are posting in the comments, I doubt they are balanced or reasonable. However, CUK members might view the comments as balanced and reasonable :)

Mike is getting a bit upset but not sure he's getting it. The example is on 70k divs which no one in their right mind will be taking (or many anyway) and he says it will cost him an extra 7/8k more but the example says 4k. Strange.

eek
26th August 2015, 14:09
Mike is getting a bit upset but not sure he's getting it. The example is on 70k divs which no one in their right mind will be taking (or many anyway) and he says it will cost him an extra 7/8k more but the example says 4k. Strange.

70k in divs is 65k at 7.5% or £4875. The calculation is very simple (x-5000)*.075 is the additional tax to pay...

Jog On
26th August 2015, 16:11
Threshold is £42,700 for 16/17

so £10,000 salary gives you £32,700 in dividends of which £27,700 is taxed at 7.5% (or £2077.50 to pay)

so £42700 taken from the company will be £40622.50 in your pocket and cost the company including corporation tax £50875

Should that read £5875 CT liability?

Or is that the gross for LTDco when taking the above as take home?

eek
26th August 2015, 16:13
Should that read £5875?

Nope It's £10000 salary directly extracted from the company
+ £32700 after corporate tax (which is £40875 before corporation tax is paid).

Alias
26th August 2015, 19:45
Nope It's £10000 salary directly extracted from the company
+ £32700 after corporate tax (which is £40875 before corporation tax is paid).

Isn't that £10800 salary next year?

eek
26th August 2015, 20:29
Isn't that £10800 salary next year?

Yep. I had done the calculation by then and I knew the starting rate was wrong. But the OP said £10000 so I stuck to that.

Also many people may be taking less as once NI starts being paid the calculations become hard work..