Thank you for your question...
The plan is tax efficient but you have to consider the following:
You should bear in mind from 6 April 2016, the notional 10% tax credit on dividends is abolished. First £5,000 of dividends would be tax free as covered by Dividends allowance. Dividends above this level are taxed at 7.5% (basic rate), 32.5% (higher rate), and 38.1% (additional rate). So you have to take into account income tax at 7.5% on dividends over £5,000.
You can pay dividends through the year and call them interim dividends.
You can pay yourself a higher monthly salary but any figure in excess of £671 per month would result in employee and employer national insurance. Your have to weigh the cost of additional NI against tax saved because of pay below personal allowance and if the net savings are there award yourself higher salary. The personal allowance for this tax year is £11,000.
Paying yourself £871 pm instead of £671pm would cost you and your company £50.83pm.
I hope this ishelpful and answers your question.
If you have any other questions,please ask me before you rate my service – I’ll be happy to respond.