was thinking, to avoid paying higher tax dividends, is it legal to create, as an example, 3 companies and from each I get paid dividends from the basic bracket? so that my tax percent is always 7.5%
Just because you hold a Director's meeting where you're the only one present, doesn't mean you shouldn't put on a shirt and order yourself a sandwich platter. When you issue a Dividend Certificate, don't forget to thank yourself for all your hard work, and thank yourself upon receiving it. Go team!
Agreed. On my third in 10 years. You get a bit of information from each of them and then have to piece it all together when talking with other directors to fully understand what happens and why. Darren’s videos have been a god send to cut through all the accountant speak. Thank you Darren!
Our global economy, yes, the interconnected web of nations, is facing challenges that demand our unwavering spirit and relentless determination. But mark my words, it is in these crucibles of adversity where the seeds of greatness are sown. This might sound too good to be true but then it’s the truth because I can beat my chest and say I made 500k USD profits from my 100K investment. Now your question might be HOW? It’s simple, I follow personalized analysis and market signals from Miss Diana Wong. Let us harness our collective brilliance and show the world what we are truly capable of. For in the face of adversity, there lies the opportunity for unparalleled greatness. Together, let us rise to the occasion and shape a world that knows no bounds.
Hey! Your videos are perfect! They are to the point, with mentions of some nuances, AND you put everything on a presentation so I can actually see and read the figures, so much better than you just talking to me! Please keep up the great work!
You know when you're learning about soemthing from a new perspective and googling a simple question only releases a bunch of other questions. Yeah thats me. Great video thanks for confusing me more but it is appreciated because the learning curve is steep at the start. Lots of love, most likely one of your employee's.
That’s interesting about the payment frequency as I was originally told by my accountant many years ago not to pay a dividend at more than 3 months frequency preferably only every 6 months in order to not make it look like salary
It is my understanding you can pay dividends as frequently as you like as long as there are enough profits and keep the relevant minutes, however, I'm not an accountant 🙈
Hi Darren, Another Q... If you pay yourself the basic director's salary, satisfying the first NI threshold, then you use up the remaining personal income tax allowance for dividends, do you need to then pay a personal NI contribution?... I guess the answer is no, because dividends aren't taxed as standard income? 🤷🏻♂️
Question. What is the tax position if the dividend is paid into a SIPP? Do you get any further relief if paying the higher rate of dividend tax, as per salary? Is it better to make direct company contributions?
So as an employee I pay 32% on basic (12% NI + 20% basic) and that is supposed to stack up to your (7.5% + 19%) - the slack you get from employees is completely fair enough :)
Great video! I have two questions... 1. The £2000 dividend allowance is that per year? 2. I have another job so do I have just one personal allowance of £12,500 combined for my day job and my ltd company. For example I am already taxed on my day job minus my personal allowance, does that mean for my dividends I have no personal allowance left?
Very informative, what are your thoughts on paying yourself a salary of £719? This means it's tax-free and avoids you having to pay national insurance?
That’s what I was going to ask. So if you paid yourself the full allowance of £12500 between the £719 per month (salary) and the rest as dividends (unused personal allowance) you would effectively pay no tax on that? Please correct me if I’m wrong. I assume national insurance is paid if you pay yourself more than £792 per month in salary? (Just to clarify its now £792 per month not £719)
Hi Darren, Great video, thanks! When considering the dividend tax rate, is each category/threshold referring to that individual's total earnings in that tax year, or only the total amount of dividend being paid? If someone was personally earning over 50k so in the higher income tax rate, would any dividend taken be immediately liable for the higher dividend rate?... I hope I'm explaining what I mean clearly 😂. I'm asking with a view to someone earning a salary from an employer and then looking to take dividends from their own business on top. 👍🏼
Hi, very helpful video! Quick question...is there a legal way to pay yourself retained profits in the current financial year but without being hit by the higher rate div tax 32.5% (assume £50k has already been paid as salary+dividend)? Regards
Thanks for information. Could someone advice? Must company - payer of dividends report about payment to tax authority? If no such obligation and receiver of dividends "forgets" to declare dividends, then no tax paid on dividends...
Darren, would you be able to do a video for a director who has a large sum of money built up as retained profits in a limited company and also has a private outstanding mortgage of the same amount. Otherwise money sources are minimal. Is there a way of settling the mortgage without incurring huge tax liabilities ?
Great video as always, I made the mistake of labeling investing as a side job until I saw people profiting with the aid of CONS. Edwin Earl so I also had to join the bandwagon now I am overwhelmed with my profit.
I just registered a llc and I'm thinking now that it would have been a better idea to register it for April 5th. Anyhow, tax efficiency should be worth it compared to the self employed rates Any software or apps you're recommending for paying salary and dividends? I'm just getting the grip of a llc
Hi Darren. I like your videos and examples. I have a question. Let's say I am company director of 2 different companies. Can I transfer my dividend (after paying corporation tax) amount from Company 1 to Company 2 (for its operation) without paying any dividend tax?
but the corporation tax need to be pay before pays any dividends, but if my profit isn't more then 85.000 a year, can I pay dividends without corporation tax? thanks you!
Thanks for this. If I do the standard 2k for the year do I still need to do a self assessment return? Also can I take 12,500 in only dividends ? And not salary
So You're making Yourself bank transfer and keep record of the 'meeting' with yourself at specyfic date and time, but do You actually declare the payment on PAYE Tool or some othere online data base ?
It's due nine months after your company year-end (for example, I started my business on 6 Oct 2022, so my year-end is 31 Oct 2023, and my corporation tax is due 1 Aug 2024). The tax is paid on profits. So turnover minus expenses, salary and pension contributions, etc.
I am about to make the first dividend payment. However I am so confused. The company belongs to me and my husband, he has got 75% ownership and I have 25%. However when comes to shares holding, he has got 90 shares and I have 10 at £1/share. How do we pay ourselves?? Please, can someone help me ??? For example, if we take around £10k between us, how should be the division? Many many thanks!!!
Can I have only one dividend voucher in total at the end of the year, to show all the dividend I have paid myself for that year. Or should I have several dividend vouchers for all the payments made through out the year.
I'm on a Tier 4 Dependent Visa. My wife is on a Tier 4 student Visa. I have started a limited company. Since my wife is a student and she can work only 20 hours per week, can I employ her in my company as a part time person and pay her basic salary i.e. 12k per annum?
I haven’t used any of my personal tax allowance this year, so can i pay myself a dividend payment up to the personal tax allowance and not pay any tax?
Is there a threshold for selling off my shares? Where by I'll need to pay some tax on it? I am looking at selling off my shares and get my money back. Its nothing large.
Does anyone know if i can put money back into my personal account from my business account if i only put it in there temporarily as i didn't have enough money to buy tools with now i do have enough money in my business account can i just pit it back without it being dividends?
I am in my first year as a Ltd company. Do I have to wait until next year and then any profits brought forward can be paid as a dividend? As I have not paid any corporation tax yet.
@@HonestMoney great video.quick question I'm desperate to get answer on. My wife does the accounts I've never been too involved until now. We havnt been taking out the £2000 tax annual free dividend allowance for the last 12 years ( although we should have as we always had ample profit and it was a no brainer tax wise_ but we didnt) Can we back claim so to speak. Ie can I do a dividend payment of £24,000 now which is the £2000 annual tax free annual dividend amount allowable tax free x the last 12 years?
Is it really true that I can use my personal allowance to get tax relief on dividends??? I think the HMRC has made a mistake on my last tax year's return sadly. Will call them. Please confirm if this understanding is incorrect before I call them
If I pay myself £732 per month as salary as sole director then am I eligible for pension when I retire? Am I paying sufficient national insurance to build my state pension when I retire in say 10-15 year's time. Please if anyone know let me know on here. Thanks
Finding a good accountant is a nighmare, ive had a few now, all say different things, all have been fired, all lost me money, so frustrating. Can anyone reccomend one?
You are not alone, it's shocking how many people I know that have been left down by poor accountants. My accountant is an Amazon specialist so I can't really recommend them for other business types.
@@dudleyjoseph9485 I am currently freelancer but i think its maybe better to be a company as i invoice over 100k per year, but all my invoicing is outside of the UK. SO my situation isnt so simple.
• How to Pay Yourself from a Ltd Company (Directors Salary 2020/2021): czcams.com/video/1NN3nbatTEo/video.html
was thinking, to avoid paying higher tax dividends, is it legal to create, as an example, 3 companies and from each I get paid dividends from the basic bracket?
so that my tax percent is always 7.5%
Just because you hold a Director's meeting where you're the only one present, doesn't mean you shouldn't put on a shirt and order yourself a sandwich platter.
When you issue a Dividend Certificate, don't forget to thank yourself for all your hard work, and thank yourself upon receiving it.
Go team!
Love it
Liking your style here!
🤣 That's right!
Bam. The meeting shall be catered!
Thank you so much! My accountant has been useless it seems!
Mine too
Agreed. On my third in 10 years. You get a bit of information from each of them and then have to piece it all together when talking with other directors to fully understand what happens and why. Darren’s videos have been a god send to cut through all the accountant speak. Thank you Darren!
Our global economy, yes, the interconnected web of nations, is facing challenges that demand our unwavering spirit and relentless determination. But mark my words, it is in these crucibles of adversity where the seeds of greatness are sown. This might sound too good to be true but then it’s the truth because I can beat my chest and say I made 500k USD profits from my 100K investment. Now your question might be HOW? It’s simple, I follow personalized analysis and market signals from Miss Diana Wong. Let us harness our collective brilliance and show the world what we are truly capable of. For in the face of adversity, there lies the opportunity for unparalleled greatness. Together, let us rise to the occasion and shape a world that knows no bounds.
Miss Wong is definetly one of the best traders I've met
Shes on TELEGRAM.s..,!⤵
@misswongofficial
I've heard a lot about Coach Wong's expertise in investing. I am looking forward to exploring this option
Miss Wong's trade signals are like gold. I've seen my portfolio grow steadily with her guidance.
I've just started my new company and these videos are a godsend. Keep it up!
Hey! Your videos are perfect! They are to the point, with mentions of some nuances, AND you put everything on a presentation so I can actually see and read the figures, so much better than you just talking to me! Please keep up the great work!
Thank you SO much for these videos! No nonsense, useful advice. I've been looking for something like this for ages.
You know when you're learning about soemthing from a new perspective and googling a simple question only releases a bunch of other questions. Yeah thats me.
Great video thanks for confusing me more but it is appreciated because the learning curve is steep at the start.
Lots of love, most likely one of your employee's.
Just came from your directors wage video. About to open business on Monday. You have been very helpful!
I am in my 1st year of the company. Good to know I can pay dicidends from the current (1st) year of trade. many thanks
Finally a video that gets straight to the point. Easy to understand. Thank you!
Love the content. Very clear and easy to digest
That’s interesting about the payment frequency as I was originally told by my accountant many years ago not to pay a dividend at more than 3 months frequency preferably only every 6 months in order to not make it look like salary
Yeah, same here Robert.
It is all perfectly legal so why does it matter if it looks like a salary?
It is my understanding you can pay dividends as frequently as you like as long as there are enough profits and keep the relevant minutes, however, I'm not an accountant 🙈
Absolutely love your videos....so jargon free and clearly explained. Thank you!! Lifesaver!!
A useful video, as always! I would like to see a video on the upcoming IR35 legislation and how it'll financially impact you/others :)
Hi Darren,
Another Q... If you pay yourself the basic director's salary, satisfying the first NI threshold, then you use up the remaining personal income tax allowance for dividends, do you need to then pay a personal NI contribution?... I guess the answer is no, because dividends aren't taxed as standard income? 🤷🏻♂️
👀
Excellent simple videos mate, it seems I can be looking forward to a profit and i didn't have a clue how to pay myself!
Question. What is the tax position if the dividend is paid into a SIPP? Do you get any further relief if paying the higher rate of dividend tax, as per salary? Is it better to make direct company contributions?
thank you so much for being so direct and easy to understand, I love it!
This is THE video I have been looking for. Nice one, thanks.
Very good videos I'm currently building up my business and forecasting decent sales so obviously this is needed info on a ltd company
Very good and sensible explanation of dividends.
So as an employee I pay 32% on basic (12% NI + 20% basic) and that is supposed to stack up to your (7.5% + 19%) - the slack you get from employees is completely fair enough :)
Amazing channel! This is stuff they should teach in schools!!
Great video! I have two questions...
1. The £2000 dividend allowance is that per year?
2. I have another job so do I have just one personal allowance of £12,500 combined for my day job and my ltd company. For example I am already taxed on my day job minus my personal allowance, does that mean for my dividends I have no personal allowance left?
I want to know this also🤔
OE for life
Yes you will not have any personal allowance as it has been used by the day job income.
So far you're best! now I will show this video to my accountant and will tell him that he is useless
Very informative, what are your thoughts on paying yourself a salary of £719?
This means it's tax-free and avoids you having to pay national insurance?
That’s what I was going to ask. So if you paid yourself the full allowance of £12500 between the £719 per month (salary) and the rest as dividends (unused personal allowance) you would effectively pay no tax on that?
Please correct me if I’m wrong. I assume national insurance is paid if you pay yourself more than £792 per month in salary? (Just to clarify its now £792 per month not £719)
Hi Darren
Thanks, I found this video really helpful. I will check out some of your others.
Just found your channel - life saver! Thank you 🙏🏽 subbed 🔥
Hi Darren,
Great video, thanks!
When considering the dividend tax rate, is each category/threshold referring to that individual's total earnings in that tax year, or only the total amount of dividend being paid?
If someone was personally earning over 50k so in the higher income tax rate, would any dividend taken be immediately liable for the higher dividend rate?...
I hope I'm explaining what I mean clearly 😂. I'm asking with a view to someone earning a salary from an employer and then looking to take dividends from their own business on top. 👍🏼
👀
I would like to know the answer to this too please if anyone can help ?
Thank you so much , very easy to understand well done
Hi, very helpful video! Quick question...is there a legal way to pay yourself retained profits in the current financial year but without being hit by the higher rate div tax 32.5% (assume £50k has already been paid as salary+dividend)? Regards
Excellent video, thank you sir
Great video ! Thanks Darren
Absolutely quality content, liked every video!
Really well explained, thank you
Thanks for information. Could someone advice? Must company - payer of dividends report about payment to tax authority? If no such obligation and receiver of dividends "forgets" to declare dividends, then no tax paid on dividends...
Darren, would you be able to do a video for a director who has a large sum of money built up as retained profits in a limited company and also has a private outstanding mortgage of the same amount. Otherwise money sources are minimal. Is there a way of settling the mortgage without incurring huge tax liabilities ?
Yes sell the business and only pay 10% up to £1M as disposal relief
Thank you Darren.
Great video as always, I made the mistake of labeling investing as a side job until I saw people profiting with the aid of CONS. Edwin Earl so I also had to join the bandwagon now I am overwhelmed with my profit.
Who is Edwin Earl and why do I keep seeing his recommendations?
Trading and other kind of investments can also be a reliable source of income.
Theo Herro if he is really that profitable, how do i contact him directly?
Edwin was recommended to me by a friend after I blew all my accounts, how good is he?
Trying to trade independently can be nothing but stressful and tiring.
the £5176, would that be subject to national insurance? in other words are dividend payments to an individual subject to national insurance?
I just registered a llc and I'm thinking now that it would have been a better idea to register it for April 5th. Anyhow, tax efficiency should be worth it compared to the self employed rates
Any software or apps you're recommending for paying salary and dividends? I'm just getting the grip of a llc
Really helpful video, thanks!
Hi Darren. I like your videos and examples. I have a question. Let's say I am company director of 2 different companies. Can I transfer my dividend (after paying corporation tax) amount from Company 1 to Company 2 (for its operation) without paying any dividend tax?
Good stuff Darren
but the corporation tax need to be pay before pays any dividends, but if my profit isn't more then 85.000 a year, can I pay dividends without corporation tax? thanks you!
Very very good video
very useful thanks
Thanks for this. If I do the standard 2k for the year do I still need to do a self assessment return? Also can I take 12,500 in only dividends ? And not salary
So You're making Yourself bank transfer and keep record of the 'meeting' with yourself at specyfic date and time, but do You actually declare the payment on PAYE Tool or some othere online data base ?
Monthly dividends? As in interim payments monthly
Great Video. Thanks
The bit I’m not sure of , is when is corporation tax paid and on how much of the income of the company is it applied to?
It's due nine months after your company year-end (for example, I started my business on 6 Oct 2022, so my year-end is 31 Oct 2023, and my corporation tax is due 1 Aug 2024).
The tax is paid on profits. So turnover minus expenses, salary and pension contributions, etc.
I am about to make the first dividend payment. However I am so confused. The company belongs to me and my husband, he has got 75% ownership and I have 25%. However when comes to shares holding, he has got 90 shares and I have 10 at £1/share. How do we pay ourselves?? Please, can someone help me ??? For example, if we take around £10k between us, how should be the division? Many many thanks!!!
Can I have only one dividend voucher in total at the end of the year, to show all the dividend I have paid myself for that year. Or should I have several dividend vouchers for all the payments made through out the year.
Do I need have at least 1 year of accounts before paying myself dividends. Or can I do it even at the start of my first year of opening my business
I'm on a Tier 4 Dependent Visa. My wife is on a Tier 4 student Visa. I have started a limited company. Since my wife is a student and she can work only 20 hours per week, can I employ her in my company as a part time person and pay her basic salary i.e. 12k per annum?
Thanks!
I haven’t used any of my personal tax allowance this year, so can i pay myself a dividend payment up to the personal tax allowance and not pay any tax?
If you have more than one company can you pay twice the dividends to yourself or is it still limited to one total amount?
Is there a threshold for selling off my shares? Where by I'll need to pay some tax on it? I am looking at selling off my shares and get my money back. Its nothing large.
Very helpful ♥️💚
Does anyone know if i can put money back into my personal account from my business account if i only put it in there temporarily as i didn't have enough money to buy tools with now i do have enough money in my business account can i just pit it back without it being dividends?
What if you are currently employed and own a biz on the side. Can you pay your self dividends?
Yes, you'll need to declare them as part of your annual self assessment in addition to your paid employment.
excellent
can you suggest t a good accountant in UK for a small start up?
I am in my first year as a Ltd company. Do I have to wait until next year and then any profits brought forward can be paid as a dividend? As I have not paid any corporation tax yet.
I am in the same situation as you, did you manage to get an answer to this yet?
thanks!
Thank you for the video! What software do you use for an accounting?
I use Xero.
@@HonestMoney great video.quick question I'm desperate to get answer on.
My wife does the accounts I've never been too involved until now.
We havnt been taking out the £2000 tax annual free dividend allowance for the last 12 years ( although we should have as we always had ample profit and it was a no brainer tax wise_ but we didnt)
Can we back claim so to speak.
Ie can I do a dividend payment of £24,000 now which is the £2000 annual tax free annual dividend amount allowable tax free x the last 12 years?
Keep em coming
what about the dividend tax?
Is it really true that I can use my personal allowance to get tax relief on dividends??? I think the HMRC has made a mistake on my last tax year's return sadly. Will call them. Please confirm if this understanding is incorrect before I call them
Yes, if your personal allowance is unused then you should be able to use it for dividends instead.
If i pay myself a 40k , then i have to pay £8000 tax ??
Can we get a copy of your templates?
can we claim dividend and salary ?
Is that 2k a month tax free or per year?
legend
If I pay myself £732 per month as salary as sole director then am I eligible for pension when I retire? Am I paying sufficient national insurance to build my state pension when I retire in say 10-15 year's time. Please if anyone know let me know on here. Thanks
Naina patel it’s covered in this video. :) czcams.com/video/1NN3nbatTEo/video.html
Yes, that will be enough to get your annual contribution - Georgy has kindly linked to the best video below :-)
@@georgyalexandrov6897 thanks Georgy will check out the video
@@HonestMoney thanks what a helpful community!
Finding a good accountant is a nighmare, ive had a few now, all say different things, all have been fired, all lost me money, so frustrating. Can anyone reccomend one?
I can thoroughly recommend mine. Are you a contractor with a LTD company?
You are not alone, it's shocking how many people I know that have been left down by poor accountants. My accountant is an Amazon specialist so I can't really recommend them for other business types.
@@dudleyjoseph9485 I am currently freelancer but i think its maybe better to be a company as i invoice over 100k per year, but all my invoicing is outside of the UK. SO my situation isnt so simple.
@@tobsstone I don't think my accountant deals with outside UK income. Certainly sounds like you have a case to go LTD. Good luck finding someone.
@@dudleyjoseph9485 Thanks
.