As we approach the end of the tax year, we thought it would help write an article explaining how dividends are distributed within a Limited company. If you have recently set up a limited company, it will be helpful for you to understand the process thoroughly.
We work with a lot of clients, helping them with their personal taxes. There are many different ways to reduce their tax liabilities if they take full advantage of the various allowances.
Being self-employed means there is a lot to take on and remember. One of many being that your business will have various running costs. Allowable expenses are one to take note of as you can deduct some costs to work out your taxable profit.
As you probably already know you can get tax relief on your pension. The amount of tax relief can vary depending on your level of earning. Plus there are annual and lifetime limits to how much tax relief you can get on pension contributions.
Prior to its April update, the government viewed the taxation of dividends as a complex process that was in dire need of change. Many people were choosing to work via their own limited companies to save tax due to the high rate of corporation tax that was present at the time.
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When you first start a business, your focus is usually on attracting customers, generating sales and building a successful company. Few business owners spend much time thinking about how or when they will eventually leave the business.
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