Guys
I talked to an accountant and am none the wiser so am asking here. (Accountant is a cousin and I don't want him to think (or find out) that I am stupid.
I intend to stop contracting on the 3rd of April and close my company soon after.
I have available cash of £50k after taking care of corporation tax.
As I have only earned 8k this year, I could take all the rest as dividends and pay 7.5% BUT that takes me to Higher rate tax band so I can go up to the edge of Basic Rate put the rest in my SIPP (via the employer contribution)
People are talking about using EA to bring the Tax down to 10% but Dividends are only 7.5%
What am I not understanding?
I talked to an accountant and am none the wiser so am asking here. (Accountant is a cousin and I don't want him to think (or find out) that I am stupid.
I intend to stop contracting on the 3rd of April and close my company soon after.
I have available cash of £50k after taking care of corporation tax.
As I have only earned 8k this year, I could take all the rest as dividends and pay 7.5% BUT that takes me to Higher rate tax band so I can go up to the edge of Basic Rate put the rest in my SIPP (via the employer contribution)
People are talking about using EA to bring the Tax down to 10% but Dividends are only 7.5%
What am I not understanding?
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