
I might have mentioned before but it really is unacceptable to simply take ‘drawings’ and hope it levels out at the year end!
![]() This is an area which can cause problems for owners of small limited companies. With the arrival of the dividend tax it’s becoming increasingly important to document, declare and pay dividends correctly as the timing of these can influence your (and other shareholders’) tax bills. I might have mentioned before but it really is unacceptable to simply take ‘drawings’ and hope it levels out at the year end!
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![]() Most of the business press has majored heavily on the negative impact of the dividend tax on small family owned businesses and to be fair it is going to be a new tax that some people are not used to paying which will come in one lump sum at 31 January 2018. The one positive to draw from the new rules if you’re a family owned company is that there is no more ‘grossing up’ i.e. what is drawn goes directly to your tax return without being adjusted upwards from net to gross income which can cause confusion. This can be helpful for things like tax credits and drawing a bit more without losing child benefit – as a reminder the thresholds are:
For the smaller investor the first £5,000 can be useful as it is tax free now and will not attract higher and additional rate tax unless dividends exceed this amount. Any dividends above the £5,000 will be taxed as normal plus the new 7.5% dividend tax. As usual, if you have any questions about Dividends, or anything else that concerns you, then please call us for a chat, or else contact us via the website here. |
Nigel GorskiSay it as it is and you'll never be misunderstood. Here in the Blog you'll see news posts on many topics of interest to your and your business... Archives
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