National Insurance on dividend earning

A question about : National Insurance on dividend earning

From my main job I get gross Ј70000 a year. I understand I am paying 12% NI contribution for income Ј7956-Ј41865, and 2% for income Ј41865-Ј70000 per annum.

This year I have got a dividend from my limited company and this is Ј10000. My accountant is saying I should pay Ј10000 x 12%= Ј1200.

My argument is that I should pay Ј10000x 2%=Ј200 as my additional earning of Ј10000 as dividend should add to Ј70000 earning and this should be calculated at 2% rate(over Ј41865) , not 12%.

The accountant says that his system does not allow him to do it and he has no knowledge of how if can reclaim overpayment on NI contributions.

By the way, this has just happened in January 15.

Can someone help me with some information please?

Thanks in advance.

Best answers:

• do you take a salary from your limited company?
  is he a real accountant and not just a mate?
• I answered your question yesterday on NI your second job and my advice today is to get a new accountant. He/she clearly has no clue!
  Dividends are not liable to NIC. They should not be added to salary. You will have to pay higher rate tax on them but the SA will work that out - but not if they have been included in salary.
• Please tell me you've fired the accountant. Are they qualified? I didn't think ACCA gave out certs in cornflake boxes
• I can only agree with everyone else that your accountant is an idiot. I would suggest that you take your business elsewhere and get a real accountant to check whatever the current one has done since you started using him - he's clearly got this wrong so who knows what else he has messed up? And if he's a member of a professional body, report him.
• Thank you guys for your replies.I should have been careful appointing my accountant. Definitely, I have been badly served and advised by my accountant. I am after a new accountant. Your answers have been thousand times better than what I received by giving money.