£38K is the current UK average wage, are business owners working for less??

[Steve Bullman]

as a small business owner why the hell do you want a salary more than your tax code. You just end up giving it up in tax. Let your accountant earn their fee and sort it.

Tax accountants aren't miracle workers though. Theres only so much you can buy and offset each year

[Al Cormack]

is that per yr or qtr

 

 

Per year Johny. 7.5% on dividend payments over £5000.

 

More % for higher rate tax payers.

[Billy]

I think he mean you take under your tax code as salary and the rest of your income as a dividend, this what I do, as I run a limited Co.

 

 

Me too, but dividends are taxed at 7.5% after first £5k up to the higher rate tax threshold and 32.5% or so after that. So if you want the money tax has to be paid.

As Steve pointed out they can't make it all go, if you're earning good money you will be paying a fair bit of tax, but it's no bother really imo.

[skyhuck]

Where did I suggest dividends were tax free???:confused1:

[Billy]

Where did I suggest dividends were tax free???:confused1:

 

 

You didn't directly, but the post I questioned appeared to promote not paying tax, so thought t was worth detailing the changes as previously for lower rate tax payers you could basically pay no tax using the system you suggested.

[richy_B]

Husband and wife teams can be quite tax efficient. On £90k profit you end up paying 20% total taxation (compared to 33% if you took two £45k salaries).

[GardenKit]

You didn't directly, but the post I questioned appeared to promote not paying tax, so thought t was worth detailing the changes as previously for lower rate tax payers you could basically pay no tax using the system you suggested.

Not to forget though that the 'company' has already paid 20% tax on the profits prior to voting them as dividends.

 

In small companies such as ours its all the same pocket.

[Ty Korrigan]

We pay 50% on top of our wage in social charges.

30% on dividends although there is a lower rate of 15%

If we keep the profit in the company we pay 10%

THEN!

Personal income tax as every one here is self assesed.

The amount varies on the number of your family, whether you employ home helps and a thousand little things you can claim like travel to work over a certain distance and home improvements.

It works out at around 62.5% over all tax rate for me.

Which is why I work 2 Saturdays/Moneydays per month.

There is an expression here used by small traders,

"4 days for France, 1 day for myself"

Ty

[Billy]

We pay 50% on top of our wage in social charges.

30% on dividends although there is a lower rate of 15%

If we keep the profit in the company we pay 10%

THEN!

Personal income tax as every one here is self assesed.

The amount varies on the number of your family, whether you employ home helps and a thousand little things you can claim like travel to work over a certain distance and home improvements.

It works out at around 62.5% over all tax rate for me.

Which is why I work 2 Saturdays/Moneydays per month.

There is an expression here used by small traders,

"4 days for France, 1 day for myself"

Ty

 

 

That's seems quite oppressive, how much does a days work for 3 guys cost the customer ?

[openspaceman]

It's £27600.

That's a median average.

Which is total bollocks.

I can remember stats at school, mean, median and mode.

For a £27600 median average, the lowest paid PAYE employee would have to be on £0, the highest on £55200.

That's a fact.

Trying to massage median figures is fiction.

The modal figure is probably more relevant, but seems harder to get hold of?

Lies, damned lies, and statistics.

 

I suspect I have never earned more than the average wage but consider myself well off for what I do, at my age it's a bit like falling off a log. I have no doubt this industry is not well paid compared with an advancing career in management, judiciary or academia, my younger brother looked like he was going to be a perpetual student, I loaned him money, but he got on the career path and ended up with 100k/annum and retired at 60 on a 30k pension, he has since paid me back in spades.

 

As you say the average isn't a useful figure but a good statistician should be able to work out the median knowing the shape of the curve ( gamma I suspect)and number of workers but the way I visualise this type of average is that one person earning 100k balances 10 people earning 10k so there are always a lot more people earning less than the average than those earning above.