Hello,
I am just starting out in business and have a question relating to salary/dividend payments. I understand the principle of this, and have decided to pay myself a (fairly) small salary and take additional funds as dividends to suplement my salary. I have a couple of questions around this though:
1) I have been told that the IR will "frown" upon seeing monthly dividend payments as they will count it as part of a salary (and hence taxable at standard rate) - is this correct?
2) If answer to above is yes, will quarterly payments be better?
3) I understand that all dividend payments come out of company profit, and are therefore liable for 10% corporation tax (apart from the first 10K profit?). Are there any tax implications for me personally - again I was told 'no' by one person (ie 5k profit means I can take 4.5K after corp. tax), but 'yes' by another (so 4.5k minus 22% personal tax).
Many thanks,
Sandy
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