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Where Taxpayers and Advisers Meet

Dividends & NI payments

Posts: 1
Joined: Wed Aug 06, 2008 3:03 pm

Postby David13 » Sun Apr 13, 2003 2:59 am

Could you please explain what NI payments are due on Directors who are paid dividends as part of their remuneration i.e. they are partly paid a salary and part as a dividend. Also are dividends paid to directors liable for Income tax at the same rates as salary.
Is this the most tax efficient method of making payments to Directors?

Many thanks

Posts: 42
Joined: Wed Aug 06, 2008 2:18 pm

Postby topcom » Sun Apr 13, 2003 6:37 am

Directors are not affected by the minimum wage, and can pay themselves a salary to cover their personal allowances £4,615 currently. Dividends are an appropriation of profit and are paid out of profits after corporation tax. If you not a higher rate tax payer then you receive a tax credit which is 10% and this equates to the rate of tax due on dividends so no further tax is due.
There is currently no nic applicable to dividends.
07768 717195

colin hall
Posts: 1
Joined: Wed Aug 06, 2008 3:06 pm

Postby colin hall » Wed Oct 08, 2003 2:17 am

Are dividend payments added to paye salary to calculate total income? If so and above higher rate what is the tax and NI implications

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