Skip to main content

Shareholders: Don’t Fall into the Dividends Trap

Very many owner directors of small companies across England and Wales are taking measures to reduce the companies’ overall tax and NIC costs by taking advantage of dividends to pay themselves a far lesser salary, which is typically around about enough to maintain their current state benefit entitlements and take any balance of remuneration from HMRC in the form of tax efficient benefits and dividends.

It has been established that HMRC themselves have noticed quite a lot of claims throughout 2016 and 2017 compared to earlier years and has commented that it would like very much to “understand” the rise of the dividend claims, and this has made quite a few good, future thinking accountants in North Wales pensive, and companies nervous. Of course, it should be stated that claiming dividends is not an illegal form of getting relief for yourself as an individual, or even assisting your business, but it should be noted that this form of obtaining relief looks very much on borrowed time.

Dividends at present are valid, useful ways of obtaining relief, as they are not a cost to the company. With this considered, dividends also don’t reduce the amount of profit which is readily available for distribution as a dividend – which can then become available to distribute to Shareholders.

The present rules on dividends is that no tax should be paid on the first £5000 of dividends received from all sources on a universal basis. The first part of basic rate brand incurs a 7.5% tax rate. Higher rate taxation is calculated at 32.5%, and 38.1% tax is payable on any dividends which form part of the additional rate band.


With the way the country could go at the General Election, there is a very real chance that the £5000 tax free allowance will be reduced to £2000, which makes very many of the dividend changes unviable.

Comments

Popular posts from this blog

Masquerade Masks

Masquerade Balls are a popular event in many parts of the world, such as Europe and North America. At these events participants wear a costume including special Masquerade masks . Masquerade masks are appealing to many as they give the wearer the ability to remain anonymous. The origin of these masks dates back to medieval times, they were worn to mark a point in royal dynasty or to celebrate marriage. Today, Masquerade masks have become a popular costume item and have spread to many parts of the world. They are worn for many different occasions, being very popular with charity events, private parties, weddings and Christmas parties. Masquerade masks can be part of any outfit, perfect for fancy dress parties. Masquerade balls have become more widespread due to featuring in many popular films, such as Eyes Wide Shit, Labyrinth and Batman Returns. Masquerade balls also made several appearances in the TV show Gossip Girl.

Understanding Construction Insurance

Construction insurance North Wales , is made up of many different types of insurance depending on the level of cover needed for your business, however, there are three essential types of cover that you will need which includes, public liability, product liability and professional indemnity insurance. It is important to know the purpose of each type of insurance if you are a contractor so that you know that you have the correct insurance in place for your business. The last thing that you would want to do is fall short and be liable to claims that can set you back more than just money alone, when it could have been avoidable. Below is an outline of each type of construction insurance along with scenarios. Public liability insurance Public liability insurance covers you in the event that a member of the public is injured or damage is caused to them or the premises in which you are working. This may include the following: Injury. You are covered if someone makes a claim a

Why You Shouldn’t Install CCTV North Wales Yourself

When you have security concerns at your premises or even worse, your residence, there’s only one way to go. CCTV North Wales is required more so than ever before, and just having a system in place is an excellent deterrent to all but the most clueless of would-be burglars. (Even the most clueless won’t get far with a decent CCTV system in place.) But how exactly should you go about getting an effective system up and running on your property? More than likely you’ve considered just going on amazon or ebay, buying a security system, and dedicating a weekend to putting it up instead of going to a CCTV Installer in North Wales. Of course, this really isn’t a good idea. Most CCTV alarm systems in the UK are actually misconfigured- and misconfigured systems can definitely trip you up later. There are a range of woes that can be experienced with a system which isn’t set up right – from evidence recorded on these systems not being admissible in court (online retailers tend t