Taking into account the recent budget changes and the new Pension Auto Enrolment Rules, I recommend taking the following Salary and Dividends from April 2015 to March 2016 from your Limited Company, assuming you have no other income and the limited company has profits available to distribute:
– An Annual salary of £8,060 (equivalent to £671.67 per month), plus
– Net dividends of £30,888
This will give you an Annual Net Income of £38,948 without an extra penny ending up in the Taxman’s Pocket.
If your Spouse is also a Shareholder
If your spouse is also a working shareholder of your company they can take the same income as you. This could give you a joint no-further-tax income of £77,896.
If you receive Other Income (Bank Interest, Rental Income etc…)
If you receive other income, apart from dividends, e.g. bank interest, rental income, etc., you can adjust the income you draw from your company accordingly.
If make Pension Contributions / Donations
Where you pay pension contributions or make Gift Aid donations, you can increase the amount of no-further-tax dividends you can draw
Amount of pension contribution or Gift Aid payment £80
Resulting increase in basic rate band £100