24.25 Salary/Dividends

✅ Corporation Tax

✅ Dividend Tax

✅ Personal Tax

✅ Employers Allowance

✅ National Insurance

✅ Pension Credits

📞 Book your consultation now!

The most efficient method to extract company profits of £50K

24.25 Salary/Dividends

✅ Corporation Tax

✅ Dividend Tax

✅ Personal Tax

✅ Employers Allowance

✅ National Insurance

✅ Pension Credits

📞 Book your consultation now!

The most efficient method to extract company profits of £50k

We are thrilled to introduce you to an optimized strategy for efficiently extracting £50K of Ltd company profits via a combination of Salary and Dividend payments during the 24.25 tax year.

Our recommendations are meticulously crafted to ensure compliance with regulations while maximizing your financial gains.

Overview

Our recommendations are for Ltd companies.
They may vary based on your specific circumstances.
There are two main methods for extracting cash out of a Ltd company.
Salary and Dividends.
You can reduce the amount of tax due with strategic Dividend/Salary planning.
The basic rate of dividend tax is 8.75%, as opposed to the 20% basic income tax rate.
We have compared against other lower salary/higher dividend ratios.
We believe this ratio achieves an additional £250 net take home.
This guide is based on company profits of exactly £50k.
This guide provisions for all taxes due.

Dividends

It’s crucial to grasp the concept of Dividends.
A ltd company must make a profit to issue Dividends.
A ltd company must be able to pay any taxes due, before issuing Dividends.
Dividends can only be drawn from retained earnings.
(The amount left over after paying company tax).
It is illegal to draw more dividends than the company can afford.
You can reduce the amount of tax due with strategic Dividend/Salary planning.
The basic rate of dividend tax is 8.75%, as opposed to the 20% basic income tax rate.
An additional £500 tax-free dividend allowance is available.

Tax-Free Dividends

A £500 Tax-free Dividend allowance is available.
This is slightly less than in 23.24.
This can be drawn at any time.
Retained earnings permitting!
Most mortgage/Lenders will take dividends into account when reviewing lending options.

Taxable Dividends

In addition to the £500 tax-free dividend allowance.
We advise drawing a weekly “Taxable Dividend.”
Retained earnings permitting!
Any additional dividends up to £37,200 will be taxed at 8.75%
We suggest a weekly taxable Dividend of £566.
Our £566 weekly suggestion equates to a total Taxable Dividend payment of:
£29,430 per year.

Tax-Free Salary

In addition to Dividends, a salary is the main method for extracting cash from a Ltd Company.
We recommend an Annual PAYE salary up to the tax-free personal allowance of £12,570.
This amounts to a salary of £1,047.50 per month.
This ensures qualification for pension credits.
While ensuring no income tax is due.
This will incur a slight national insurance charge, which can be paid quarterly.
A salary counts as a Company expense.
Therefore, reducing Company Tax due.
We believe this strategy is all together, the most efficient.
This will also qualify businesses with employees for the £5k Employers N.I Allowance.

Payment Structure

We advise creating the following “Regularly scheduled payments.”
We advise using the suggested references.
We specifically recommend setting these up as regularly scheduled payments (standing orders).
A regularly scheduled payment will allow you to attach the relevant reference.
A Regular transfer between your accounts may not.
Taxable Dividend – £566 Weekly
Directors Salary – £1,047.50 Monthly.
Tax-Free Dividend – £500 One-off.
Equating to a monthly take-home average of £3,327.

Tax Planning

Personal Tax

We recommend the following planning for Personal Tax (Dividends).
We advise transferring £49.52 per week into a Dividend tax pot/space.
Ideally, from your personal account into a personal space, as this is a personal tax.
The total Dividend tax due is £2,575. (8.75% of £29,430.)

Company Tax

We recommend the following planning for Company Tax (Corporation tax).
Company Tax of approximately £7,000 would be due.
We’d recommend Quarterly Company Tax reviews.
Company Tax/Corporation tax can be transferred into a Corporation tax space.
From the Company bank account into a Company bank account space.
This money must remain in the Company.
It should not be transferred to an external/personal pot.
Any use of spaces for company liabilities, such as VAT, Company Tax, CIS Tax, PAYE Tax etc.
Must be Company spaces within a Company bank account.
While it can prove efficient to transfer funds into spaces!
Company cash must remain in the Company to avoid tax implications.

Conclusion

The outlined structure would achieve a net take-home pay of £39,925.
That accounts for all taxes due.
On profits of £50k.
Equating to a monthly take-home average of £3,327.
This ensures tax compliance.
While optimising for tax efficiency.
The total amount of tax payable is £10,074.

The idea behind this guide is to set up regular payments at the beginning of the year and allow the rest to take care of itself.

If you have specific payment requirements or seek alternative arrangements, please get in touch.

Available Monday to Saturday 09:00 – 17:00

Call 020 3822 0201

Email info@njb-taxback.co.uk

Call Now

Download our App today!

The idea behind this guide is to set up regular payments at the beginning of the year and allow the rest to take care of itself.

If you have specific payment requirements or seek alternative arrangements, please get in touch.

Available Monday to Saturday 09:00 – 17:00

Call 020 3822 0201

Email info@njb-taxback.co.uk

Call Now

Download Our Free App

Download our free app on the iOS Appstore and Google Playstore.

Download

Speak To Us

Available Monday to Saturday 09:00 – 17:00

Call 020 3822 0201

Email info@njb-taxback.co.uk

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24.25 Salary/Dividends

✅ Corporation Tax

✅ Dividend Tax

✅ Personal Tax

✅ Employers Allowance

✅ National Insurance

✅ Pension Credits

📞 Book your consultation now!

The most efficient method to extract company profits of £50K

24.25 Salary/Dividends

✅ Corporation Tax

✅ Dividend Tax

✅ Personal Tax

✅ Employers Allowance

✅ National Insurance

✅ Pension Credits

📞 Book your consultation now!

The most efficient method to extract company profits of £50k

We are thrilled to introduce you to an optimized strategy for efficiently extracting £50K of Ltd company profits via a combination of Salary and Dividend payments during the 24.25 tax year.

Our recommendations are meticulously crafted to ensure compliance with regulations while maximizing your financial gains.

Overview

Our recommendations are for Ltd companies.

They may vary based on your specific circumstances.

There are two main methods for extracting cash out of a Ltd company.

Salary and Dividends.

You can reduce the amount of tax due with strategic Dividend/Salary planning.

The basic rate of dividend tax is 8.75%, as opposed to the 20% basic income tax rate.

We have compared against other lower salary/higher dividend ratios.

We believe this ratio achieves an additional £250 net take home.

This guide is based on company profits of exactly £50k.

This guide provisions for all taxes due.

Dividends

It’s crucial to grasp the concept of Dividends.

A ltd company must make a profit to issue Dividends.

A ltd company must be able to pay any taxes due, before issuing Dividends.

Dividends can only be drawn from retained earnings.

(The amount left over after paying company tax).

It is illegal to draw more dividends than the company can afford.

You can reduce the amount of tax due with strategic Dividend/Salary planning.

The basic rate of dividend tax is 8.75%, as opposed to the 20% basic income tax rate.

An additional £500 tax-free dividend allowance is available.

Tax-Free Dividends

A £500 Tax-free Dividend allowance is available.

This is slightly less than in 23.24.

This can be drawn at any time.

Retained earnings permitting!

Most mortgage/Lenders will take dividends into account when reviewing lending options.

Taxable Dividends

In addition to the £500 tax-free dividend allowance.

We advise drawing a weekly “Taxable Dividend.”

Retained earnings permitting!

Any additional dividends up to £37,200 will be taxed at 8.75%

We suggest a weekly taxable Dividend of £566.

Our £566 weekly suggestion equates to a total Taxable Dividend payment of:

£29,430 per year.

Tax-Free Salary

In addition to Dividends, a salary is the main method for extracting cash from a Ltd Company.

We recommend an Annual PAYE salary up to the tax-free personal allowance of £12,570.

This amounts to a salary of £1,047.50 per month.

This ensures qualification for pension credits.

While ensuring no income tax is due.

This will incur a slight national insurance charge, which can be paid quarterly.

A salary counts as a Company expense.

Therefore, reducing Company Tax due.

We believe this strategy is all together, the most efficient.

This will also qualify businesses with employees for the £5k Employers N.I Allowance.

Payment Structure

We advise creating the following “Regularly scheduled payments.”

We advise using the suggested references.

We specifically recommend setting these up as regularly scheduled payments (standing orders).

A regularly scheduled payment will allow you to attach the relevant reference.

A Regular transfer between your accounts may not.

Taxable Dividend – £566 Weekly

Directors Salary – £1,047.50 Monthly.

Tax-Free Dividend – £500 One-off.

Equating to a monthly take-home average of £3,327.

Tax Planning

Personal Tax

We recommend the following planning for Personal Tax (Dividends).

We advise transferring £49.52 per week into a Dividend tax pot/space.