Question


Martin G

Does a Limited Company have to pay for distributing dividends?

Hi, I would like to know If a Limited Liability company has to pay for distributing dividends? I know that a shareholder has to pay or 10% or 32,5% depending if the dividend income is at or below the £37,400 basic rate tax limit. But I have the doubt If the Limited Company has to pay something more than corporation tax, for distributing dividends. I would really appreciate a response as tomorrow as I need this information for my business plan. Thanks in advance. Obviously Im speaking of a Uk Limited Company...

6 months ago - 2 answers

Best Answer

Chosen by Asker

Dividends are the post-tax profits of a company, which are distributed to shareholders in proportion to their percentage holding in the company. For contractors and other business owners who fall outside the IR35 rules, working via a limited company is the most tax efficient way of working. Most contractors will elect to receive a small salary which attracts little or no National Insurance liabilities. The rest of their income will be in the form of dividends. To calculate how much you can distribute to shareholders as dividends, you should take away all company expenses (salary, accountancy fees, etc.) from your company turnover. Then subject the remaining sum to the small companies' tax rate (21% in the 2008/9 tax year). You are free to distribute the remaining cash as dividends. The voucher will state the total net dividend paid, and the tax credit.

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Google the question and you find all you will need

by jackie m

6 months ago

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Other Answers

Visit HMRC pages ... or see below & read all about it ...

by Steve B- 6 months ago