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 £2K.
£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 [point 2].
Now I need to work out how much national insurance is due. Based on this information, anything less than £6475 requires 0% national insurance, then, if you earn more than this in a year you pay £3.05 per week and between £9,500 and £50,000 is and additional 9% on top of the fixed weekly amount. [point 3]
So, £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]
Now, £6475 is free from national insurance. [point 5]
For the next £9,500 - £6475 = £3025 its £3.05 per week and so accounted for by [point 4]. [point 6]
This leaves £12,500 - £9,500 = £3000 where the rate is 9%. £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.
