IR591: Calculator and Seminars
Speculation is increasing about what the Chancellor will do in the Budget to ensure small companies 'pay the right amount of tax'. One firm of accountants has provided a calculator to show company owners what the cost could be under a range of options the Chancellor may impose.
Accountants, PKF's dividend calculator is available here:
Dividend Tax Calculator
PKF said: "Thousands of owner-managers that carry on business through a company and pay themselves in dividends (rather than take a salary) face huge tax increases in this year's Budget.
"For example, an owner-manager whose company makes profits of £35,000 in a year may take a salary of £5,000 and dividends of £25,000. If the dividends are taxed as salary, the owner would see a reduction in his income of £5,324 - over 15 per cent of the company's total profits.
"Many of the business owners that visit UKTECH will be affected by this change and may welcome the chance to work out what it will cost them."
Different methods of taxing such dividends will produce different tax charges. Using PKF's calculator, company owners can see the impact on their income for each of the following options open to the Chancellor:
- Treating the dividends as salary
- Charging NIC on such dividends
- Imposing an investment income surcharge
- Removing the tax credit from the dividends
- Abolishing the 0% starting rate of corporation tax