Where Taxpayers and Advisers Meet

Limited company

tommypaul123
Posts: 1
Joined: Sun Apr 23, 2017 6:13 pm

Limited company

Postby tommypaul123 » Sun Apr 23, 2017 6:55 pm

I've stared a limited scaffolding company I'm only planing on taking dividents will be under 32k but I work for a scaffolding company Monday to Friday as self employed and earn 500 per week 50weeks off the year so 25k p/a and pay 20% income tax on it so does that mean I've only got 7k in divedents before I go in to the higher bracket.

GlobalTaxAdviser
Posts: 483
Joined: Fri Dec 05, 2014 1:18 am

Re: Limited company

Postby GlobalTaxAdviser » Mon Apr 24, 2017 1:39 pm

Hi

Presumably you are changing a status from self employed to a director/employee of a limited company ?

Though technically you maybe considered as an employee of the scaffolding company (you currently work for) too depending on the nature of the work including supervision and direction etc.

Maybe an idea to get an accountant

Kind Regards

GTA

simplyaccountant
Posts: 6
Joined: Tue Apr 25, 2017 2:42 pm

Re: Limited company

Postby simplyaccountant » Tue Apr 25, 2017 3:12 pm

Hi Paul,

If I understood your question correctly then you are right. Your £7,000 under that arrangement will fall in higher tax bracket.

Personal allowance £11,500
Dividend allowance £5,000
Income liable @ Basic Rate £33,500
Income liable @ Higher Rate £7,000

Above all represents £25k of self employment income and £32k of withdrawal of dividend form newly formed company.

However I would like to draw your attention to both Class 4 and Class 2 NI on top of that. I assumed that your figures of both self employment income and dividend income are post any allowable expenses.

Hope above helps and open to fair criticism from fellow members.

Regards


Return to “Tax Investigations and Enquiries”