Dividends

When your limited company makes a profit, you can choose to pay a percentage of that profit to your shareholders. This is known as a dividend payment and is one of the most common ways for directors and shareholders to extract cash from a successful business. But did you know that the dividends you receive are taxed separately...

As an owner-manager, your chief concern will be making your business profitable and building up cash reserves in the company. But you’ll also want to be able to extract funds from the business too – whether this is via a regular monthly salary, or ad-hoc dividend payments. Salary vs dividends is the most common split, but there are...

On 6 April 2021 the tax-free allowance for dividends remains the same at £2,000.  However, the personal allowance will increase to £12,570. The dividend allowance is in addition to your personal allowance. There are no dividend tax credits anymore.  All dividends are deemed to have been paid gross. The standard rate of tax on dividends is 7.5%. Dividend...