Multiple streams of Income UK | How are you taxed

If you’ve got multiple streams of income, be it 2 streams or more, there’s no doubt you will want to know how the tax deductions work for you in a given tax year. After all, you work hard for your incomes, and the last thing you want to do is allow tax man to take more than an optimal share of your income, simply because you’re not in the know. 🌏 Accounting & Tax Academy Free Membership Site → https://aidhanfinancial.com/accountin ... 🌏 Income tax rates and thresholds 2020-21 and 2021-22 download → https://aidhanfinancial.com/uk-budget-2021/ ⏱️ Time Stamps: 0:00 - Introduction 0:48 - What exactly do we mean by multiple income streams (active and passive)? 2:27 - What are the most common multiple income streams (in our experience)? 3:31 - How does the tax work when you have multiple income streams? 4:36 - Worked numerical example If you want my & my team's expert accounting and tax help, you can book a discovery call through our website → 🌏 https://www.aidhanfinancial.com/ ★ In 2021-22 the income tax bands are: • Personal Allowance = £12,570 (0%) • Basic rate = £12,571 to £50,270 (20%) • Higher rate = £50,271 to £150,000 (40%) • Additional rate over = £150,000 (45%) The National insurance thresholds that you need to be aware of when paying yourself as a business owner. ☆ The Lower Earnings Limit (LEL) threshold is the point at which you qualify for state benefits such as your pension. As long as you pay yourself above this threshold then you will get your pension credit every year. • £120 per week • £520 per month • £6,240 per year ☆ The National Insurance Primary Threshold is when as an employee of your Ltd company you start paying employees NI. • £184 per week • £797 per month • £9,568 per year The primary threshold is subject to national insurance at 12% between £9,568 and £50,270, and anything over that is at 2%. ☆ The National Insurance Secondary Threshold as your Ltd company (the employer) begins paying employers NI on behalf of your employees: • £170 per week • £736.67 per month • £8,840 per year The secondary threshold does not have an upper limit so anything over £8,840 is taxed at 13.8%. The dividend allowance for 2021/2022 is £2,000. This is tax free and the same as the previous year 2020-21. ☆ The dividend rates for this year are: • Dividend allowance = £2,000 (0%) • Basic rate = £14,571 to £50,270 (7.5%) • Higher rate = £50,271 to £150,000 (32.5%) • Additional rate over = £150,000 (38.1%) We hope this video has helped you understand how multiple income streams are treated for tax here in the UK and taken you one step closer to knowing your numbers. ★☆★ OUR MISSION ★☆★ Me & my team are dedicated to helping and empowering YOU to 'Know Your Numbers' so you can make calculated and informed decisions in your business, company and personal finances towards your definition of success. ★☆★ OUR PHILOSOPHY ★☆★ If you take care of your numbers (finances), your numbers will take care of you, your family and those you value the most. 🔴 DISCLAIMER Our videos are for general guidance, education and empowerment in helping you understand accounting, tax and your numbers. They in no way constitute specific advice to your specific circumstances. Me & my team would be delighted to help you with your specific queries or accounting requirements through a formal engagement. #multipleincomestreams

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