HOW OFTEN CAN YOU TAKE DIVIDENDS FROM YOUR COMPANY?

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Owners worry about accessing money from their company, especially if they’ve heard conflicting information about dividends. In this video Dan runs you through the reality.
Topics include:
Declaring dividends
Paying dividends from profits
Can you take dividends from previous years profits
How dividends are calculated
Do you pay tax on dividends
How much dividend you can pay tax free
Dividend tax basics
Dividend tax as a director
Paying a dividend
Dividend tax rates UK
Legal dividends
How frequently you could take dividends
00:00 Intro
00:33 Quick recap on dividends
00:00 Dividends used to feel tax free
01:37 How often can you take dividends (short answer)
01:54 Final and Interim dividends
02:43 Salary, dividends and pay
03:05 Making dividends legal
04:38 The danger of dividends
05:30 Summary
… and more!
If you have any questions on this, please comment below.
While we can't give 1-2-1 advice here (due to professional regulations), we may be able to give you some general guidance.
Subscribe to our Podcast on Spotify and Apple: “The HeelanHub Podcast” - a show for small business owners.
Join our mailing list for tax tips at: www.heelanassociates.co.uk
You can see more about what we get up to as an Accountancy Business on the following:
LinkedIn (Dan): / danheelan
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Twitter (Company): / heelanassocs
Web: www.heelanassociates.co.uk
Call: 02392 240040 Email: info@heelanassociates.co.uk
#accounting #smallbusinessuk #tax

Опубликовано:

29 июн 2024

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Комментарии : 27

@AdamBilliald 9 месяцев назад

These videos are very useful - thank you 🏆

@HeelanAssociates 8 месяцев назад

Glad you like them!

@anthonythorne1 8 месяцев назад

Hi Dan, great insightful video as always, thank you 👌 I do love your tips and advice, I was just wondering if you would do a video on lending your company money through a Directors Loan account and charging interest on this? I'm curious as to whether this is more tax beneficial way if you are in the lower rate tax band paying 20%, than taking Dividends after Corporation Tax? My accountant said they doesn't come across this very often, or the CT61 form is too much hastle.

@HeelanAssociates 8 месяцев назад

This is actually a good one, will add the the list. The hassle is absolutely one of the key reasons this isnt done more often!

@ralph1969ify 9 месяцев назад

Really informative, thank you

@HeelanAssociates 8 месяцев назад

Glad it was helpful!

@stevendavis5180 8 месяцев назад

Business owners version of Martin Lewis! Love the videos 👍 really helpful. Would love a video on what can be claimed on vehicle usage for vans and company cars

@HeelanAssociates 8 месяцев назад

We have you covered on this one, there is a couple of videos on Vans particularly in the works. Glad you enjoy!

@stevendavis5180 8 месяцев назад

@@HeelanAssociates great 👍 Thank you

@kierancameron481 9 месяцев назад

Great video as always Dan! Just one quick question, if you could recommend 5 financial/productivity based books to read, what would you suggest reading?

@HeelanAssociates 8 месяцев назад

Glad you enjoyed! So finance wise, you what, there aren't many great ones that i've come across. But on productivity...... some of my favs: Getting Things Done by David Allen Time Management by Brian Tracey (audible) 13 Week Year One Minute Manager Meet the Monkey

@RyanLloyd-pw8ou Месяц назад

Hi Dan On a profit and loss account for abridged accounts or on total exemption of full accounts Does the profit and loss/retained earnings account show the amount before or after dividends are taken?

@HeelanAssociates Месяц назад

Normally the retained earnings on a balance sheet are shown at the position at the date, so after dividends. If you have access to a profit and loss they won’t usually show dividends. Sometimes you might also get a changes in equity ‘grid’ that shows you exactly the dividends taken.

@chockalingams4700 7 месяцев назад

Great video… Sorry for the basic question, so both dividend as well as the director loan (the company owes director) are paid after corporate tax? I read director loans which company owes can be paid before corporate tax but in one of the video comment I read it’s after corporate tax so checking this…. Let’s consider the director has is own work and is on 40% tax band, when he takes dividend out is 1st £1000 free of his personal tax only?

@HeelanAssociates 7 месяцев назад

In the tax year 23/24 yes only first £1000 of dividend would be ‘tax free’ in terms of personal tax. Presuming you had no other dividend income. Dividends are after tax, this may help www.heelanassociates.co.uk/something-every-small-business-should-know-illegal-dividends/ Directors loan is hard to explain here in this context; you are loaning the company’s money to yourself, so you have to consider other liabilities like tax and people you owe money to, but could loan before paying tax in theory. As I say hard to explain in a comment.

@lawrencer25 9 месяцев назад

Fabulous video ❤❤❤❤

@HeelanAssociates 9 месяцев назад

Glad you enjoyed.

@callum2793 8 месяцев назад

Completely unrelated to this video, but I have recently taken over a VAT registered business and applied to transfer the VAT number to myself (sole trader) should I still be charging VAT on my sales? I’m still waiting for the VAT number to be transferred. Hope that makes sense

@HeelanAssociates 7 месяцев назад

While we couldn’t comment on your exact situation, if you an active vat number yes vat usually should continue to be charged.

@Andy5c 8 месяцев назад

Im a bit late to the party here but been watching all your videos as im super confused over what I think is a simple question. I have a full time job earning 50k but also have a number of BTL. Assuming these were in a company structure i would pay 19% coperation tax. Fine understood. Lets say in 5years time i quite my job and the company now has 100k in profit sat there. If i paid myself from the company am in effect getting taxed twice as i paid 19% coperation tax when i left the money in the company and now I want it, im going to be taxed again either as a salary or dividend? Also if you pay yourself a salary or dividend does this class as an expense so you dont then pay copeartion tax as well?

@stevendavis5180 8 месяцев назад

I know you want the main man’s advice but I can tell you with certainty that if you are on salary for your limited company then it is classed as an expense (so No corporation tax on that because it’s your personal salary) With the double tax you refer to Your company will pay the corporation tax on company profits and yes no matter how you wish to draw those profits to yourself personally will be taxed, so as dividends for example, you can only take dividends from company profit (which yes has already been taxed) but to pay it personally to you at say 8% tax on dividends is still overall Cheaper than paying tax and national insurance on the same amount Hope that helps

@Andy5c 8 месяцев назад

@stevendavis5180 really appreciate your reply so if I was due to make a 40k profit from my company but took it all as a wage then in essence I my company hasn't made a profit so no coperation tax to pay as all the money has come out and taxed as a wage. Correct? Yes I'm clear on the dividend piece as in you in effect are paying 19% plus 8% so 27% overall.

@stevendavis5180 8 месяцев назад

@@Andy5c in theory yes but because you already have a regular high wage, by taking another high salary I’d imagine your tax implications of taking Antony salary will be pretty hefty Definitely worth talking to an accountant to find the least painful way of doing it 👍

@Andy5c 8 месяцев назад

@stevendavis5180 thanks for the replies. I was thinking in the future if I left my job I could take the profit as a wage and only pay tax on salaries then this not needing any coperation tax payments as well. Thanks for your help tax sure is confusing. I'm just learning about the pay on account pain I'm about to face lol

@HeelanAssociates 8 месяцев назад

Not a bad answer Steven ;-) Ty for contribution