Maximise income

[Bomber]

Hi,

I, as most of you own myco. What I'm thinking of is taking the most income home without going into the higher tax bracket. So how I thought I would achieved this is by paying myself a salary of 35,999, paying all the PAYE on that @ 20% income tax, employers NI and Employees NI. Then after all that was done, pay corp tax on any profits and then take 35,999 in dividend and pay then 10% tax on that.

I'm thinking that salary income and div income are 2 seperate things and therefore if I was to do the above I wouldn't break into the higher rate tax band.

Any thoughts much appreicated

[StarBuck]

Hi,

I, as most of you own myco. What I'm thinking of is taking the most income home without going into the higher tax bracket. So how I thought I would achieved this is by paying myself a salary of 35,999, paying all the PAYE on that @ 20% income tax, employers NI and Employees NI. Then after all that was done, pay corp tax on any profits and then take 35,999 in dividend and pay then 10% tax on that.

I'm thinking that salary income and div income are 2 seperate things and therefore if I was to do the above I wouldn't break into the higher rate tax band.

Any thoughts much appreicated

Take cover

[NotAllThere]

...
I'm thinking that salary income and div income are 2 seperate things ..

You think wrong. The 40% tax rate applies when you exceed the limit for your TOTAL earnings.

[malvolio]

Personal tax is based on your gross personal earnings from any source and has been since around 1825. But how is life on planet Zorg, anyway...?

[Crossroads]

Any thoughts much appreicated

Take professional advice.

[techno]

Hi,

I, as most of you own myco. What I'm thinking of is taking the most income home without going into the higher tax bracket. So how I thought I would achieved this is by paying myself a salary of 35,999, paying all the PAYE on that @ 20% income tax, employers NI and Employees NI. Then after all that was done, pay corp tax on any profits and then take 35,999 in dividend and pay then 10% tax on that.

I'm thinking that salary income and div income are 2 seperate things and therefore if I was to do the above I wouldn't break into the higher rate tax band.

Any thoughts much appreicated

[Bomber]

Thanks

Wishful thinking I know. Zorg is ok, I hear the weather is better on safire so I'm floating around the void atm.

[slackbloke]

Hi,

I, as most of you own myco. What I'm thinking of is taking the most income home without going into the higher tax bracket. So how I thought I would achieved this is by paying myself a salary of 35,999, paying all the PAYE on that @ 20% income tax, employers NI and Employees NI. Then after all that was done, pay corp tax on any profits and then take 35,999 in dividend and pay then 10% tax on that.

I'm thinking that salary income and div income are 2 seperate things and therefore if I was to do the above I wouldn't break into the higher rate tax band.

Any thoughts much appreicated

Brilliant, you have brightened up my day :-)

[handyandy]

Sadly the operative word is 'income' as in 'Income Tax' - don't matter where it comes from - pay, interest from savings, dividends, etc. - if it's any type of income you get (other than capital gains and inheritance which have their own taxes) is usually covered by Inc. Tax and all the different sources are grossed up - what you do get is a tax credit for the corp tax your LTD already paid that offsets the basic rate element of income tax due on your divis.

Now that raises a question in my mind - now that corp tax is up at 21% and basic rate tax is down at 20% has anyone worked out if this has any effect on how much we should pay as PAYE vss Divis to minimise tax.

[chicane]

Mal, I'm slightly concerned that the recent toning down of your responses has resulted in more stupid questions being asked on this board than previously.

Can we have the old intolerant Mal back please?

Personal tax is based on your gross personal earnings from any source and has been since around 1825. But how is life on planet Zorg, anyway...?