Sorry, just need to bounce some numbers of those here who are proficient at Tax calcs.
I am being asked to calculate optimum Dividend payment for the two shareholders in our business, so as to maximise these up to the 40% threshold.
Am I correct in assuming that as neither has any P11D benefits, that there Tax Allowance of £7,475 + £35,000 @ 20% = £42,475 and provided the dividend (including its Tax Credit) does not take them over this limit, it will not incur further Income tax?
If I then calculate the dividend + Tax credit (at dividend paid/90 x 10), would this work OK?
Example Shareholder with 51% (51 shares)
Salary to April 5 2012 = £7,800 Dividend Paid = £611.91/share = £31,207.50 Tax Credit = £31,207.50 / 90 x 10 = £3,476.50 Total Dividend & Tax Credit = £34,675.00
Total Incomce to April 5 2012 = £7,800 + £34,675.00 = £42,475
Have I got that correct?
Numbers are made up and will have to find best compromise as there are two shareholders with different salaries and share holdings, but wante dot check my spreadsheet numbers were correct?
