How much more dividend to take out to be tax-efficient?

[ujjain]

How much more dividend should I pay out to be tax-efficient?

There will be one more salary payment of gross £883.33 at the end of the month.
Donations this year from my personal bank account: £850.

I asked my accountant, but I get very confused with his answers and I sometimes thinks he doesn't really care.

All I want is to do the tax-efficient think and I think that means maxing out the "higher rate" dividend bracket, which means salary+dividends should be £100.000.

The dividend tax is going up next year is why I'd like to pay myself out more now, instead of next year.

[northernladuk]

I asked my accountant, but I get very confused with his answers and I sometimes thinks he doesn't really care.

And you think a bunch of people on an internet forum who are not accountants and know absolutely squat about your situation do?

Get back on to them and don't let them go until it makes sense. It's not rocket science.

[TheFaQQer]

Are you already in the higher tax bracket this year? Are you likely to be in the higher tax bracket next year?

Without considering both of those, it's an impossible question to determine which is more tax efficient.

When I ran the figures yesterday, it turns out my wife will have an increased tax burden of £5, but I can't be bothered to faff around to get the optimum tax efficient level. Letting the tax tail wag the dog just isn't worth it at times.

[WordIsBond]

You can't just add dividends paid to salary. You have to understand how the dividend tax credit works, and that you are paying net dividends but gross dividends are used to determine your taxable income. Your post shows that you don't understand this, which means you won't understand what your accountant said. So learn it, and then talk to him. But I'm pretty sure you are already into the additional rate band when gross dividends are considered.

It will be simpler to understand next year since the dividend tax credit will be gone.

[northernladuk]

And get a new accountant. Your current set up obviously isn't working.

[Pondlife]

You can't just add dividends paid to salary. You have to understand how the dividend tax credit works, and that you are paying net dividends but gross dividends are used to determine your taxable income. Your post shows that you don't understand this, which means you won't understand what your accountant said. So learn it, and then talk to him. But I'm pretty sure you are already into the additional rate band when gross dividends are considered.

It will be simpler to understand next year since the dividend tax credit will be gone.

The OPs link shows the gross divvy of £86.6K meaning a net of £78K

[WordIsBond]

The OPs link shows the gross divvy of £86.6K meaning a net of £78K

So it does. I'm an idiot. I'd edit my post but then no one could see what an idiot I am. Look, everybody!

[john@UKCA]

HMRC Dividend checks?

Will HMRC start looking closely at the tax returns of director shareholders who receive unusually large dividends in 2015/16 around feb/march time?

Make sure proper paperwork & documents are in place to support the dividend payments just in case HMRC decide to start attacking this area.

[SueEllen]

Will HMRC start looking closely at the tax returns of director shareholders who receive unusually large dividends in 2015/16 around feb/march time?

Make sure proper paperwork & documents are in place to support the dividend payments just in case HMRC decide to start attacking this area.

Well they will be looking at mine from previous years.

[northernladuk]

Will HMRC start looking closely at the tax returns of director shareholders who receive unusually large dividends in 2015/16 around feb/march time?
.

Have you asked your.. Erm.. Err.. Dunno what to say here.