Dividends

Dividends are the primary way to take money out of your company.

Dividends are payable after Corporation Tax; all profits are yours to take.

The first £1,000 in dividends is tax-free!

Some dividends are tax-free; you can take £1,000 in dividends without being taxed.

Above that, they are taxed @ 8.75% up to the higher rate tax threshold, £50,270 and then at 33.75%.

Remember, you must be making a profit first and pay Corporation Tax before taking any dividends!

It can also be advantageous to add a partner as a shareholder and use their £2,000 allowance. This is achieved by using Alpha shares.

Alpha shares are A,B,C ... Shares. We can set up a B class shares for your partner to receive the tax-free Dividends.

Timing is also essential. Spread your Dividends over tax years to save tax. B4Bookkeeping can help organise this to ensure tax efficiency.

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Dividends​