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Dividend Tax

April 26, 2018, 6:13 am
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Hi

I'm trying to get my head around something.

If my limited company makes £33500 profit this year and I take a dividend of £33500, I'll pay 19% CT on the 33500 and 7.5% dividend tax on £31500.

CT = £6365.50
DT = £2362.50
Total = £8727.50

However if I pay myself salary of £33500, the company will pay zero CT on that and I'll only pay tax after £11500 personal allowance, which with NI would work out at about 32% so £10720.

With this gap seeminly narrowing each year that goes by, do some people see the whole traditional way small LTD company owners pay themselves changing? will it simply just equalise (like it almost has now) and nobody care anymore?

It seems the dividend tax a few years back basically removed that tax saving loophole for all small company owners. I'm not surprised most people who could simply took their business abroad.

cheers
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Is income tax calculated on monthly pay?

April 26, 2018, 10:20 am
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Hi,

Basically I earn 40.5K a year, so after tax I should earn £2.4k/month.
Last month (March 2018) I did a lot of OT - £1950 worth to be exact.
I was expecting approximately 30% to be taken off that for tax/NI/Student loan etc.
However I just got my payslip (PAYE) and it correctly states the pre-tax OT pay as 1.95K, but it works out as only 1K post tax.

Putting the figures into an income tax calculator I can see that I have been charged as if I were earning 64K a year (i.e. my basic plus OT every month) and subsequently have been charged £500 odd pounds at 40% tax rate.

Does this mean later on in the year I will pay less tax to even it out?
Or do I have to claim it back somehow?

Any advice would be much appreciated

Kind Regards
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Over £100k confusion on tax & pension & ISA

April 26, 2018, 1:47 pm
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Hi, my husband is new to this concept of over £100k salary. After having read quite some google pages, there are several things really puzzle us.

For example, he makes £110k as basic pay plus £20k as bonus at end of the year (not sure if it's guaranteed).

1. Say, not considering the possible bonus, if he pays every month in the company pension plan (£110k-£99k)/12months = £916.67, would this be sufficient to avoid losing his allowance?

2. I read somewhere that the adjusted income (which the personally allowance is based on) would need to include the portion of pension that company contributed too? Is that really true? If so, wouldn't this defeat the purpose of Point 1?

3. At end of the year, if he really receive that £20k bonus, can it be put into the pension pot in one-go?

4. Does he somehow need to call HMRC each time when there's a fluctuation of events, like the above?

5. After retirement, do people pay tax on their pension when it's taken out from the pot? If so, wouldn't the tax-free nature of the pension when putting in the pot be a little meaningless? Don't get this at all!

4. Does ISA help with cutting tax at the salary pay stage at all? My understanding is that it's only for saving interest free and has nothing to do with pre-tax salary pay. But can't understand why ISA is mentioned everywhere as an alternative to pension.

Any insights would be much appreciated!
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Should I go for childcare vouchers?

April 26, 2018, 2:04 pm
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This is quiet complex and maths unfortunately are not my strongest thing.

I have openned a LTD where both me and my wife are employed.

We are planning to get paid the amounts that would not take us above nil tax band which would be I believe £910 pm

We have 2 children and we are currently getting child tax credits.

I need to understand if I was to register with childcare voucher provider and start paying ourselves childcare vouchers would I be better off or worse off bearing in mind my child tax credit will reduce.
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deleted,,,?

April 26, 2018, 6:13 pm
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Deleted - how does one delete a new thread..?
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Employed & Self Employed

April 27, 2018, 1:50 am
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Hi Guys,

I'm currently employed on a part-time contract with Sainsburys (12 hours per week) and have been since November 2016. Because of this I don't often exceed the taxable threshold and NI threshold but did for two months in this time. I'm also a 1st year full-time student.

However, I have recently restarted acting and working as a film extra in free time, and this requires me to register as Self-Employed. I've never had to register with HMRC myself, and was wondering if anybody would be able to provide a step-by-step guide as to what and how to do this. For now I will be keeping my Sainsburys job in conjunction.

Cheers Guys
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Leaving uk and coming back?

April 27, 2018, 3:39 am
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Hello everyone, hope someone can help since I couldn't find proper answer anywhere. I left UK one month ago and I did p85 cause I was sure I will not come back to UK at least for one year.but my plan has changed and I would like to come back as soon as I can..i read somewhere that when you do p85 you can not do it for at least one full tax year. What does that mean? What would happen if I will ? Thank you for any help
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Leaving uk and coming back?

April 27, 2018, 4:36 am
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Hello everyone, hope someone can help since I couldn't find proper answer anywhere. I left UK one month ago and I did p85 cause I was sure I will not come back to UK at least for one year.but my plan has changed and I would like to come back as soon as I can..i read somewhere that when you do p85 you can not do it for at least one full tax year. What does that mean? What would happen if I will ? Thank you for any help
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Stamp duty on 2nd home if I do not live in it

April 27, 2018, 7:27 am
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I need some help on this complex issue of stamp duty please.
My ex wife live in our house as part of the divorce settlement. House to be sold in December 2020 and is currently on a interest only mortgage and ex pays this.
I recently got remarried and my wife wants me to go onto her mortgage. House value - £500K and outstanding mortgage £150K. When I go on mortgage it will be registered 50/50 but I will only pay 50% of the outstanding mortgage which will be £75K so not stamp duty is due as it falls below the threshold. Will I be liable for the 3% stamp duty because of the 1st property even if it is not my main residence?
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Self Employed: Budgeting Balancing Payment

April 27, 2018, 12:09 pm
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So, I've got myself in a pickle from day 1 of running my business, but I am now learning how to manage my finances.

Is there anyway to budget for your balancing payment in January in particular? If you are expecting your income to increase next year, but your monthly income varies?

Also, how would you budget for a BIG increase in your income. Here's a practical example i.e.

Year 1 = £15'000 income after expenses (tax ~£1500)

Year 2 = £45'000 income after expenses (tax ~£10'000)

So there would a balancing payment due by end of Jan for ~£8500.

My two questions really are;

- How to budget for it when your monthly income varies wildly.
- How to budget when there is a large increase in your income.

Hopefully that makes sense, thanks.
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Natonal Insurance Refunds

April 27, 2018, 12:42 pm
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Hello I've worked 5 jobs last tax year. One after the other and added up my national insurance and reckon I have overpaid. This is where I need someone to explain if I actually are entitled to a refund. As I understand national insurance is treated seperatly for each employment not a sum total over the year like income tax.Also the gov website says I need to get the refund from my employers(oh dear) instead of them.

I understand If I earn over the weekly or monthly threshold then 12% over that is taken off, but where does the yearly threshold come into effect?

Job 1(paid monthly)
Paye - 636.24
NI - 0

Job 2(paid monthly)
Paye 8,364.14
NI - 514.10

Job 3(paid weekly)
Paye - 756.50
NI - 34.26

Job 4(Job seekers so monthly I guess)
Paye - 146.21
NI - 0

Job 5(paid monthly)
Paye - 3526.72
NI - 196.72

Total - 13,429.81
NI - 745.08
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T tax code

April 28, 2018, 3:02 am
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I did some supply teaching last tax year and just earned over the tax threshold so paid a little PAYE. My tax code was 1150L.

My tax code now shows as 1185L on the gov gateway.

I am still supply teaching in the same school and my last weekly payslip shows a 500T tax code. I will ask them of course but why would this be? A search shows it's if my tax code is under investigation or I earn over £100,000, but I have no idea why I would be under investigation as nothing has changed.

I get paid by an umbrella company and work for an teaching agency.
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Tax code

April 28, 2018, 3:27 am
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A simple question I hope.

I have a tax code of 524 M/0
I know what the 524 is, and the M is having transferred 10% of tax allowance from generous wife!
But what is the 0 for ?

Many thanks.
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Inheritance tax and cash gift

April 28, 2018, 6:45 am
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My Mother gifted me £200k over 3 yrs. She’d sadly passed away recently, before the 7 yr tax exemption time frame was over. I therefore presume that I am now liable for IHT on that amount.

Would someone be able to clarify the tax implications of this situation?

Thanks
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Variable low income and PAYE

April 28, 2018, 11:50 am
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Hi all, would appreciate some help as I’m baffled.
Been charged £344 income tax through PAYE this month, So net income is much lower than expected. Basic outline of my income:
1. Employed, but hourly paid. Approx £12k pa highly variable income paid via PAYE. Some months I earn £0. This was a bumper month and I intended to put some of the income towards next month’s low income.
2. Rent out a property (with another person, so this is half of the income). Approx £5k pa. Do self assessment and pay tax through this. Up to date with tax payments.

My query is why I am having tax deducted from my current year’s salary when I have already called PAYE (in Feb) and said that I do not expect to earn over the min threshold this year, so even if I have a bigger earning month the money will be evened out? They have begun deducting again. I understand that this may end up being refunded as a rebate but with such a low income I cannot pay my essential bills if they tax me on my higher earning months, as I will have nothing for the months I earn £0.
Any advice? Thanks
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Section 9a of the taxes management act 1970

April 29, 2018, 4:17 am
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I have received a letter from HMRC stating that they want to check my return.

I was initially a little worried that this may be some sort of scam as some things just don't seem right (please see below), but the figures they quote are correct.

The 03000 number of the letter does not show up on any sort of google search, this is the first thing that I looked for which raised my suspicions.

The second thing is that they are asking for information from a period which I think is out of date, they are asking about the period ending the 5th of April 2016 which I submitted on the 30th of January 2017, their letter is dated the 25th of April 2018.

From what I understand, they should not be asking about this period under a section 9a as they are out of time (they have 12 months from the date I submitted them).

Whilst I don't think I've done anything wrong, should I really give them information for a period they shouldn't be asking for ?, also a little worried they might think I've something to hide and I may be making things worse by refusing.


I called the 03000 number and the person who sent me the letter was not available, so I left my number and asked him to call me, the next day i received a call from an unknown mobile number (I missed the call) and when I called it back it was the "Compliance Officer").

I find it very strange they would call me from a mobile number, though he did seem very surprised that I called him back.

Furthermore, he asked me to put my documentation together and would arrange for someone to collect them, this doesn't sound normal practice.

There is just a simple HM Revenue and Customs address with a postcode, is this normal practice (eg no email address)?.


I don't have an accountant and until the year in question for over ten years was more or less running at a loss, I'm now into profit and can afford an accountant (until now I could not).

All advice greatly received.

Pete
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IHT on estate with potential outstanding liability

April 29, 2018, 11:47 am
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About 11 years ago my late mother and some other relatives sold a building in Poland which they had jointly inherited. For reasons I don’t think I need go into, the contract contained a clause that if full and perfect title could not be passed to the purchasers within ten year the contract would be void and the purchase monies due for repayment. Full title has not been passed and the issue is bogged down in negotiations and potential lawsuits. This means there is a chance that my father, who inherited from my mother, will have to repay a six figure sum in US$.

My question is about probate and inheritance tax issues if the issue is not concluded before my father dies. A maximum potential liability in US$ could probably be estimated. My questions are what part of his estate would have IHT payable after his death? - presumably IHT would not be payable on the amount of the potential liability? And how would this affect the distribution of his estate? – would the amount of the potential liability be held aside and the balance distributed, with the settlement of his estate not being concluded until this matter was concluded?
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Tax on RSUs

April 29, 2018, 2:57 pm
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Apologies if this question has been asked before, no doubt others find this subject as confusing as I do so I’m looking for guidance from those that have some insight.

I have restricted RSUs with US employer, which are taxed at 50% upon vesting. Effectively 50% of the stock is deducted from the vested number of shares at that time.

I filled out W-8BEN form at the time of signing up for the RSUs.

My questions is, should the RSU deduction amount be 50%? Since I am a higher rate UK tax payer, 50% seems to be the wrong amount. I thought that filling out W-8BEN would ensure that correct tax was paid.

Thanks in advance.
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Driven insane with PA, salary sacrifice, state pension and tax codes

April 30, 2018, 4:32 am
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Unfortunately as I was checking my payslips since being in possession of both salary sacrifice cars and found during the year 2017/2018 I have had many tax codes.

I got my first SS car October 2016.
Tax year 2017 April to Sept I had an SS car. Then a gap, then I was issued with another SS car in November 2017 due to the first one being written off.

Tax codes are as follows:-
April -2017 - 1065L cumul
July – 2017 – 62L cumul
August 2017 - 55L noncumul
Sept – 2017 - 53L noncum
October 2017 - 320L noncum
March 2018 - 217L non !!!
April 2018 - 38L

Ok all I have is my state pension, my nhs salary, and a salary sacrifice car. Do they include my state pension as part of my total overall gross income? I'm sorry but not having had a state pension and worked full time before I don't know how this works tax wise?

When I received my state pension in July 2017 I half expected a change in a tax code along with HMRC and employer taking into consideration the SS car I had at the time tax wise.and state pension.

However with the recent new SS car lease contract in November 2017 I expected maybe an extra £50 tax would be taken not nearly £200 extra in tax PAYE as has been taken last month as well as being pay rolled £265.81 a month for the SS car.

Response from my employer ; I can confirm that we have been informed via Fleet Solution that your payments will be £265.81 per month. Your Tax code has increased for 53L Non !!! to 320L non !!! which gives you more Tax Allowance but we are informed via the HRMC to change your Tax code. Unfortunately the Inland Revenue will not speak to us regarding your Tax.?? Can you please give them a call on 0300 200 3300 and they will let you know what information they have received from Fleet Solution that changed your Tax code

On my querying this with nhsFleet said they have sent the P46 documentation to HMRC. HMRC are saying it is the information they are receiving from my employer that has changed my tax code not nhsFleet.

I have not yet received my PIID form to look at this either.

I feel like I’m being bounced between Fleet, my employer and HMRC. It might all be correct but I wouldnt know because I am totally confused even ringing up HMRC who confused me further.

Many thanks in advance for anyone that can make head nor tail of this. :eek:
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Claiming Tax Relief on Company Car

April 30, 2018, 7:37 am
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Hi, I am looking for any help at all regarding claiming for Tax Relief on a Company Car.

Apologies if this isn't the right way to go about it...

I have had a company car for a year now, which I pay towards through my tax. When I claim my diesel from the company I work for they give me 9p for every mile. This does not even cover the actual costs of the diesel, when I last worked this out it was about 13p a mile I needed to break even, so the difference I am having to pay.

Someone told me I can claim tax relief on the fuel I put into the company car but when I have looked into this I am bamboozled by the various diffferent options and how vague the tax site is and the forms to be completed.

I am hoping someone has done this before and can point me in the right direction or even let me know what I can actually claim for and what I can't.

Any help would be greatly appreciated!!
:money:
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