Hi there. I work for my fathers company, or which i own a 10% share. I am currently paid £50K per annum and have heard about directors dividends and wonder if someone could shine soem simple light on how this might help me save tax (Which is a good thing)...?
are there any regulations about the ize of company in terms of profit/turnover/assets etc...
much appreciated.
CS
Director's Dividends
6 posts • Page 1 of 1
by King_Maker on Fri Aug 12, 2005 11:13 am
Directors are not entitled to dividends, only shareholders.
Have you and the other family member(s) spoken to the company's accountants to establish the best mix of remuneration - salary/pension/benefits in kind/dividends etc?
Have you and the other family member(s) spoken to the company's accountants to establish the best mix of remuneration - salary/pension/benefits in kind/dividends etc?
- King_Maker
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by csykes on Sun Aug 14, 2005 11:32 pm
yes, but felt they didn't realy try to explain anything. I am a 10% share holder.
a friend has a smaller business, and his accountant has him paid about 8k a year through paye and then he takes £3k a month through directors dividends/ so he calls them.
???
PS: thanks for your input...
a friend has a smaller business, and his accountant has him paid about 8k a year through paye and then he takes £3k a month through directors dividends/ so he calls them.
???
PS: thanks for your input...
- csykes
- Posts: 2
- Joined: Wed Aug 06, 2008 3:28 pm
by King_Maker on Sun Aug 14, 2005 11:53 pm
I suspect your friend owns 100% of his business (with any wife as a possible shareholder).
In such circumstances, it is not unusual for the owner to be paid ~ £4800 in salary + dividends. The £8000 figure is often paid in the mistaken belief that NMW (National Minimum Wage)applies to Directors (without service contracts).
As your shareholding is only 10%, you need to confer with the other shareholders (family?)about paying dividends. Get the accountant to explain the options again.
In such circumstances, it is not unusual for the owner to be paid ~ £4800 in salary + dividends. The £8000 figure is often paid in the mistaken belief that NMW (National Minimum Wage)applies to Directors (without service contracts).
As your shareholding is only 10%, you need to confer with the other shareholders (family?)about paying dividends. Get the accountant to explain the options again.
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by King_Maker on Mon Sep 05, 2005 2:51 am
emilien1970,
It is perfectly legal to take any amount as a monthly dividend, assuming the company has adequate distributable reserves.
You should ensure that the relevant paperwork exists to combat any HMRC assertion that these payment represent salary/wages etc.
Restricting the annual total dividends (plus other income) to below the 40% income tax threshold) should be mean no personal tax.
It is perfectly legal to take any amount as a monthly dividend, assuming the company has adequate distributable reserves.
You should ensure that the relevant paperwork exists to combat any HMRC assertion that these payment represent salary/wages etc.
Restricting the annual total dividends (plus other income) to below the 40% income tax threshold) should be mean no personal tax.
- King_Maker
- Posts: 4934
- Joined: Wed Aug 06, 2008 3:22 pm
6 posts • Page 1 of 1
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