Dividends
Dividend
A step by step Dividend guide on how to pay and process for companies and their owners. At a Glance: If you are a shareholder, your company may distribute its profits to you by way of a dividend. Paying a Dividend has to follow a proper legal process otherwise the dividend will be illegally paid. An illegal dividend
Dividend Tax Rise & Rates
The prime minister announced on 9th Sept 2021 a 1.25% Dividend Tax rise from 6 April 2022, and a rise in National Insurance Contributions (NICs) by way of a new Health and Social Care Levy. The government said the move would raise an additional £600m a year. The new dividend tax rates, which will apply across the UK, are: Tax
Diary of Main Tax Events – March / April 2018
Tax diary: All the main tax events for March / April 2018 Welcome to this month’s Tax Diary, providing you with all the main tax events for the next couple of months including key deadlines and what’s likely to be due. These deadlines are intended to be used as a guideline and are based on the general requirements of
Tax efficient salary and dividends for 2018/19
How to extract profit from companies in a tax efficient manner for 2018/19 The new tax year means that many directors of companies will be considering the most tax efficient method of paying themselves. For many years accountants and tax advisors have suggested that director/shareholders should extract profit by paying themselves a low salary with the remainder of their income being
Taxing dividends in January
The rules for taxing dividends changed radically from 6 April 2016 with the removal of the 10% notional tax credit and the introduction of new rates of tax on dividends. For many taxpayers there will be more tax to pay on those dividends on 31 January 2018. Up until 5 April 2016, the 10% dividend credit meant that basic
HMRC computer isn’t always correct
HM Revenue and Customs have acknowledged that their software and some commercial software used by accountants doesn’t always come up with the right amount of tax payable! You may have seen this reported in some newspapers such as the Daily Telegraph. This arises because the tax system of different income tax personal allowances, dividend allowances, savings rates has become
New tax free allowances started on 6 April
The £5,000 dividend and savings allowance of up to £1,000 have been with us since 6 April 2016. There are now two further allowances available since 6 April 2017. There are concerns that these have not been widely publicised and not properly understood. The first £1,000 allowance is against self-employed income. This is a deduction from gross income so
Better to pay interest on your loan account than dividends if higher rate taxpayer
Ever since the introduction of the 7.5% increase in the rate of tax on dividends in April 2016, it has been more tax efficient for owner managed business shareholders to pay interest on their loans to the company rather than pay themselves dividends. The interest would be deductible against the company’s profits saving corporation tax at 19% (was 20%),
Should we give shares to children and pay £5,000 dividends tax free?
The introduction of the £5,000 tax free dividend allowance has tempted many family company shareholders to give shares to other family members so that they can be paid £5,000 a year tax free. (Note that this allowance reduces to £2,000 from 6 April 2018). Such a strategy needs to be carefully structured as there can be Capital Gains Tax
Tax free dividend allowance to be reduced to £2,000
The Chancellor also announced measures to limit the rise in tax-driven incorporation. The £5,000 tax free dividend allowance introduced by George Osborne will be reduced to just £2,000 from 6 April 2018. Mr Hammond claimed that many smaller owner-managed businesses have incorporated as limited companies mainly for tax reasons. Typically the director/shareholders of such businesses have paid themselves in
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