For the Jan 2020 to Jan 2021 I was working and being paid in the US. All tax etc. was paid in the US. I came back to the UK and started a business - a limited company where I am director and only employee. The business has been active from 01/01/2021.
Since Jan 2021, my business has been paid exactly
£14,500. I need to verify that what I'm doing with this in regards to UK tax obligations is correct. So here it goes:
We are entitled to
£2K dividens tax free for the tax year 2020-2021. Since I am yet to collect any dividens for this tax year, I will take the
£14,500 - £2000 = £12,500 [point 1]
The remainder I intend to pay myself as salary, using my personal tax allowance for the year April 2020 to April 2021. Since I was an employee in the US, playing by US rules during April 2020 to end of December 2020, I have not taken any of my
£12,500 personal allowance. So, no income tax is due
Now I need to work out how much national insurance is due. Based on this information, anything less than
0% national insurance, then, if you earn more than this in a year you pay
£3.05 per week and between
£50,000 is and additional
9% on top of the fixed weekly amount.
£3.05 * 52 weeks = £158.6. This amount is basically fixed and not dependent on amount earned, since all bands need to pay
£3.05 a week. `[point 4]
£6475 is free from national insurance.
For the next
£9,500 - £6475 = £3025 its £3.05 per week and so accounted for by
£12,500 - £9,500 = £3000 where the rate is
£3000 * 0.09 = £270.
Therefore the total amount of national insurance due is
£158.6 + £270 = £428.6 and I can pay myself
£12,500 - £428.6 = £12,071.4 as salary.
I'd be very greatful if somebody would verify my calculation here so that I do not inadvertently do the wrong thing.