1. Dividends – The Annual Dividend Allowance (£5,000 Tax-Free)
The current personal tax-free dividend allowance is £5,000. If you have not drawn this much from your business then at the very minimum you should consider distributing this amount out to each shareholder.
If for cash-flow reasons, your business cannot afford to have £5,000 withdrawn per shareholder, then you can always pay out a dividend and then redeposit it back into the business as a director’s loan.
This way you will have crystallized the tax-free allowance from this tax year and will be able to draw the money back again, tax-free, at a future date whenever your cash-flow allows it.
Please note, dividends can only be paid out if your business has profits that it can distribute.
Read more
Four Things To Consider Before The Tax Year Ends
1. Dividends – The Annual Dividend Allowance (£5,000 Tax-Free)
The current personal tax-free dividend allowance is £5,000. If you have not drawn this much from your business then at the very minimum you should consider distributing this amount out to each shareholder.
If for cash-flow reasons, your business cannot afford to have £5,000 withdrawn per shareholder, then you can always pay out a dividend and then redeposit it back into the business as a director’s loan.
This way you will have crystallized the tax-free allowance from this tax year and will be able to draw the money back again, tax-free, at a future date whenever your cash-flow allows it.
Please note, dividends can only be paid out if your business has profits that it can distribute.
Read more