Dividends tax rate

[ccnewbie]

Hi, this is my first post so sorry if its been covered elsewhere, i can't see it.

I've recently set up my own company ( electrician )

I plan to pay myself the basic salary - so know tax due, and the rest in dividends.

My question is if after costs etc, the limited company had 20k - would this 20k be liable to corporation tax.

Or would the dividends be allowed to be taken out and tax paid on them.

sorry if i'm waffling - what i mean is, if i decided to take out 20k dividends - would my tax liability be 2k - based at 10% rate?

Many thanks.

[section 44]

The company would pay dividends out of after tax profits (i.e. after it has paid corporation tax).

Effectively dividends received are taxed at 25% for higher rate taxpayers and 0% for basic rate taxpayers.

[Incredulum]

When you say you plan to pay yourself the "basic" salary, how much do you mean by this?

[section 44]

Would minimum wage laws be in point?

[Incredulum]

Would minimum wage laws be in point?

No as he is (presumably) not a s54 (NMWA 1998) "worker". (Unless there is an employment contract which (presumably) there is not.)