We currently advise a pay structure for a sole director, for the tax year 6th April 2023 to 5th April 2024, as follows:
£758 per month Directors Standard Salary (£9,096 total salary for the year)
£41,174 Dividends for the year (approximately £3,431.16 per month) Please ensure the company has sufficient profit to pay this level of dividends.
This will bring you up to the higher rate tax limit and give you a tax liability of £3,211.25 due by 31st January 2025. As the payment due is over £1,000, a payment on account will also be required.
If you anticipate any additional personal income, please provide and I will advise.
As a general guide (and based on only the £758 per month salary) here are the anticipated levels of tax due on specific levels of dividend payments:
£10,000 = £483.53
£20,000 = £1,358.53
£30,000 = £2,233.53
£40,000 = £3,108.53
£41,174 = £3,211.25
£50,000 = £6,190.03
£75,000 = £14,627.53
£90,904 = £19,995.13
IF THE LIABILITY EXCEEDS £1,000 A PAYMENT ON ACCOUNT IS REQUIRED
If the liability for the year ended 5th April 2024 exceeds £1,000, a payment on account for the tax year ended 5th April 2025, is required. This means that in January 2025 you will pay an additional half of the current tax years liability, less any payments on account already paid. A further half will be due in July 2025.
Based on a salary of £9,096 and dividends of £41,174 in the year ended 5th April 2024, you would be due to make a payment on account of £1,605.63 by 31st January 2025 and £1,605.63 by 31st July 2025 on account of the year ended 5th April 2025.
We currently advise a pay structure for two or more directors, for the tax year 6th April 2023 to 5th April 2024, as follows:
£1,047.50 per month Directors Standard Salary (£12,570 total salary for the year)
£37,700 Dividends for the year (approximately £3,141.66 per month) Please ensure the company has sufficient profit to pay this level of dividends.
This will bring you up to the higher rate tax limit and give you a tax liability of £3,211.25 due by 31st January 2025. As the payment due is over £1,000, a payment on account will also be required.
If you anticipate any additional personal income, please provide and I will advise.
As a general guide (and based on only the £1,047.50 per month salary) here are the anticipated levels of tax due on specific levels of dividend payments:
£10,000 = £787.50
£20,000 = £1,662.50
£30,000 = £2,537.50
£37,700 = £3,211.25
£40,000 = £3,987.50
£50,000 = £7,362.50
£75,000 = £15,800.00
£87,430 = £19,995.13
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