Quote:
Originally Posted by TheDaddy
Stop being naive Andrew, Pip obviously knows how this stuff works   |
Around £9100 a year is currently the most tax efficient PAYE figure, it's the sweet spot where you pay no tax or NI but you are still earning your old age pension entitlement. You then take the rest in dividends, first £2k tax free, plus you have the difference between the £9100 and the £12570 tax allowance. Up to £50k in dividends is very tax efficient (8.75%), above that and it needs a bit of creative accounting.
So rough figures, a limited company director earning £60k a year is paying less than £5k in tax, plus he's claiming expenses on top. Don't ask me how I know, but I wish I had realised years ago the benefits of taking the plunge and being your own boss.
Not forgetting the £40k into the pension tax free every year.