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bigduckontax
bigduckontax, Accountant
Category: Tax
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My wife and I own a small business. We draw a small salary

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My wife and I own a small business. We draw a small salary and then take out dividends.
I own 60% and my wife owns 40%.
I estimate we have drawn £24,000 (before tax) in salaries, and about £110,000 in dividends.
Approximately what will be our tax liabilities for Jan 2017 and July 2017
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Before I can fully address your question I need to know whether your business is run as a limited company or a partnership.
Customer: replied 1 year ago.
Hi Keith
Its a Limited company.
Expert:  bigduckontax replied 1 year ago.
Well that makes it a bit easier. If you are directors of this company then all salaries must be disbursed through PAYE arrangements. Dividends will be grossed up for tax. The totals paid out by the company amount to 134K, 80.4K to you and 53.6K to your wife. An income of 80.4K would be taxed as follows. 80.4K - 10.6K [personal allowance] = 69.8K exposed to tax of which 31.785K is at 20% [6.35K] and the balance at 40% [15.206] total tax due by 31 Jan 17, GBP 21556. Your wife's tax bill will be of the order of 6.35K plus 4.486K, total GBP 10836. There will be an allowance for all tax paid under PAYE plus the notional tax credits on dividends. Remember that the dividends do not count against the company's profits in the Corporation Tax (CT) computations. You will have no liability in July 2017, your next tax bill payment will be due by 31 January 2018 reflecting your 16/17 tax year's incomes. Presumably you will have to file a Self Assessment Tax Return annually. I do hope that you have found my reply of assistance.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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