I’m thinking of setting up a limited company as a side line as I earn £45ish k a year in a full time job, am I right in thinking (after watching this video) that I can “pay” myself a £2k tax free dividend but leave it in the business and build it up until say I have enough to buy my self a car for instance? It’s a mine field understanding it all and I’m just trying to work out what’s the best way to be tax savvy. Really helpful videos you post thanks
So the business will pay 19% corporation tax on its profits. Then it’s your choice what to take out. So if you only took 2000 divi, then no further tax (presuming you don’t have more dividend income). The tax planning point is that you want to balance taking some out, because if you decided to withdraw a massive chunk for a car you *might* pay more tax than you would be spreading drawing money across tax years.
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I’m thinking of setting up a limited company as a side line as I earn £45ish k a year in a full time job, am I right in thinking (after watching this video) that I can “pay” myself a £2k tax free dividend but leave it in the business and build it up until say I have enough to buy my self a car for instance? It’s a mine field understanding it all and I’m just trying to work out what’s the best way to be tax savvy.
Really helpful videos you post thanks
So the business will pay 19% corporation tax on its profits.
Then it’s your choice what to take out. So if you only took 2000 divi, then no further tax (presuming you don’t have more dividend income).
The tax planning point is that you want to balance taking some out, because if you decided to withdraw a massive chunk for a car you *might* pay more tax than you would be spreading drawing money across tax years.