Three things you must know about dividend tax

dividends

Starting from 6 April 2016, a new dividend tax will take place. For a complete dividend tax report, please email ask@hca-accountants.com, if you need a quick summary, here is the three important things you must know.

1. You can take out £43,000 out of your limited company before you hit the higher rate income tax.  The higher rate income tax on dividends is going to be 32.5% ( this was previously 25%).

2. Your £43,000 would be split between £11,000 salary and £32,000 dividends.

3. On the £43,000, you will pay £2,025 income tax although you save £2,200 corporation tax by paying yourself the £11,000 salary.  So it is pretty much almost tax-neutral.

 
 
 

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