Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello Ian, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
You can pay yourself whatever you like through PAYE channels. Remember as a director you are an employee per se and must be remunerated through PAYE. Dividends can only be distributed if free funds are available. The first 5K of dividends are tax free in the hands of the recipient.
The personal allowance is 11K and is for the whole of the tax year. It has nothing to do with PAYE.
You can pay yourself what you like, but at the levels you suggest you will be in the 20% tax bracket. You should process your P45 through the PAYE system and it will all come out in the wash so to speak. If, as you say, you have already earned 10K the indeed you only have 1K of income free of tax.
Your surmise on dividend treatment is correct, but make sure that they do not push you into the 40% tax bracket.
I do hope that you have found my reply of assistance.
Thank you for your support.