amount of tax to be pay

[alain]

Hi

I would like to know the amount of tax i will need to pay soon, my salary is £1450 net by month plus every 3 month i have a dividend of £9900, we start in April 2006. Can someone let me know how much tax i will need to pay on my dividend and when ,because i don't think i need to pay more tax on my salary.

thanks

alain

[Instinctive]

Really need to state the gross salary and not net.

I guess that the gross salary is approximately £25,000.

This only leaves approximately £15,000 worth of basic rate band available for dividends.

I also assume that the dividends are £9900 net and not gross. If so, the gross value is £11,000 per quarter or £44,000 per year.

Approximately £30,000 worth of gross dividends will be charged to higher rate tax of 32.5% less tax credit of 10%. This means additional tax of 22.5% on £30,000 = approximately £6,750.

This will be for the tax year 2006-07 and the tax for this will be due on 31 January 2008. However, you may also need to pay additional tax on account for the following tax year 2007-08 in the sum of £3,375 (50% x £6,750) on 31 January 2008 and the same amount again on 31 July 2008.

Therefore, your tax due at 31 January 2008 could be £6,750 + £3,375 = approximately £10,000.

Assumes you don't have any other income, gains or allowances in 2006-07.

Ramnik

[al_eebee]

See also

http://www.taxationweb.co.uk/forum/discuss.php?id=14336

Above