Salary and dividends on top of Benefits

[bmqz]

If you receive Carer's Allowance and Universal Credit and the amount is still under your Income Tax Personal Allowance, can you still pay yourself a salary and/or dividends and not be subject to tax as long as it is under the Personal Allowance of £10000?

For example:

If I received carer's allowance (£61.35) a week and paid myself a salary of only £100 a week (you cannot earn more than £102 a week if you care on Carers Allowance), since it comes up to £8390.20 a year, can I pay myself the £1609.80 in dividends?


Thanks in advance.

 

[Newchodge]

At that level dividends are not subject to tax, so yes, as far as income tax is concerned. I'm not so sure about carer's allowance.

 

[MyAccountantOnline]

Dont forget when you do any calculations you have to 'gross-up' dividends to include the tax credit you cant just include the amount you've received.

 

[David Story]

Hi
I've got a question too
Do I have to include company benefits in benefits calculator even if they are not taxable this year ?

 

[Scalloway]

What do you mean by company benefits?

 

[David Story]

I'm sorry, I meant dividends of course

 

[Scalloway]

They are taxable income, even your income is below the personal allowance.

 

[David Story]

Yes, but they are taxable in next tax year. That's why I'm confused.

 

[Scalloway]

Your income is taxable in the year it is earned. You may pay tax the next year if insufficient tax has been deducted when it is paid.

 

[David Griffiths]

The company pays corporation tax on its profits, before dividends are deducted, in the accounting year that the profits are earned

The dividends are taxable income for the shareholders in the income tax year in which they are paid