Well should we lament the passing of the 32k facility held for many years as the golden egg of directorship? Or rather embrace changes inevitable from the Chancellor as he seeks to level the playing field between employed taxed at source and those foolhardy enough to enter into business risking often homes marriages and families in the pursuit of a dream?
Chipping Away
So it would appear the hickory handled sledge hammer was kept at bay, as first Boy George then Phil decided to let us down gently, with a couple of years at 5k, before applying the screws and implementing the 2k limit on tax free dividends.
Not to be frowned upon.
I am lucky in that my client base is of a frugal nature and profits rarely leave reserves of any significance on the company balance sheet, pleased as I am to be working in this area I am minded to calculated, that it is still beneficial to remove reserves via the dividend route. A tidy 10k extracted from held reserves, attracts a dividend tax of £750.00 and most clients agree that the evidence shows an increase in directors salary of this magnitude would attract PAYE and NIC’s in excess of £2,500.00 using a tax code of 1150L. so fear not my Stout Yeoman all is not lost.
