Low salary-high dividend payments soar
The ‘dividend-salary’ mix traditionally favoured by incorporated consultants has expanded well beyond the niche contracting space, a dataset indicates.
In fact, serving to underline the growth in self-employment in the general economy, the ONS found that the total paid in dividends by workers beat its expectations five-fold.
So rather than the £12.2billion originally anticipated in worker dividend payments, the total amount paid in such distributions by the self-employed in 2016 was £61.7bn, the Financial Times reported.
Commentators say the rise in self-employment since the 2008 financial crisis has put many more people in the position of being able to pay themselves a low salary and high dividends.
Another factor pushing up dividend payments relates to April next year, when the amount that can be distributed tax-free is due to fall to just £2,000, compared with £5,000 currently.
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