Dividend tax amount if earning from another Job

[finlamit]

Hi all

I have a full time job which I am earning £55,000 per year. My employer has kindly allowed me to freelance at weekends in which I have setup a limited company (as is required for a lot of freelance contracts I take on).

Quick question. If I pay myself in dividends from my limited company I understand there is no tax for the first £2000, however I am confused as to the amount of tax after the £2000. It says its 7.5% basic rate depending on salary then 32.5% for higher rate. Does the salary from my full time job count towards this? Or only the salary generated from the limited company?

Salary from full time job: £55,000
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Salary from limited company: £12,570
Dividends: £10,000
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Based on the above would the tax on the dividends be 7.5% or 32.5%?

Thanks

M

 

[simon field]

32.5%.

Your salaries counts towards it.

 

[DWS]

You will be paying 40% tax on the salary from the Ltd and some N/I and 32.5% on the dividends!

 

[WaveJumper]

Going forward I would recommend seeking out the services of a local accountant ..... will save you a lot of headaches in the future and possibly more importantly some money.

 

[simon field]

Going forward I’d recommend getting a wife who doesn’t earn much and making her a shareholder!

 

[MyAccountantOnline]

Bear in mind it'll be 33.75% from April

 

[pentel]

You will be paying 40% tax on the salary from the Ltd and some N/I and 32.5% on the dividends!

Your company will also need to allow for paying corporation tax on profits before paying your dividend.

Hopefully you have an accountant who can do year end planning with you.

 

[Ramubhaiya]

Are you not better off putting that money in pension instead of paying 40% tax on dividends?