Dividend Tax

[dimazigel]

Hi everybody.

I have a question about Dividend tax and how it is applied. I'm thinking if I'm going back to Permie and close my company. If I pay myself 31800 dividends than I do not pay any extra tax since it is covered by Corporate Tax. Than I go permie and have a salary, let's take for example 70K(all the PAYE taxes deducted by employer of course).
How Dividend tax is applied in this case. Do I have to pay anything extra or Dividend tax is absolutely separate towards Income tax and NIC?

[Clare@InTouch]

Dividends are always taxed last, on top of any salary. If you have salary of £42,475 or more then all of your dividends will be higher rate, and you'll have a tax liability equal to 25% of the net (assuming your income is higher rate, not additional rate).

This assumes you're taking the final dividends and getting the new salary in the same tax year.

You could of course look into closing the company and taking any final distribution as capital rather than income.

[northernladuk]

Dividends are always taxed last, on top of any salary. If you have salary of £42,475 or more then all of your dividends will be higher rate, and you'll have a tax liability equal to 25% of the net (assuming your income is higher rate, not additional rate).

This assumes you're taking the final dividends and getting the new salary in the same tax year.

You could of course look into closing the company and taking any final distribution as capital rather than income.

What Craig said Hee hee

Do you have an accountant to help you through this process?

[Clare@InTouch]

What Craig said Hee hee

Do you have an accountant to help you through this process?

Don't think I haven't noticed you calling me Craig young man