Dividends and Taxation

[malvolio]

Thanks - can you just take the 7068 as a lump sum & avoid operating a payroll? or do you have to submit certain forms for the salary to hmrc? The last couple of years I've just taken all dividends!

AIUI it doesn't matter how or when you take the money out, but if it is to be treated as salary you have to be registered for PAYE with the Revenue. Which means you have to run a payroll of some kind.

[Waldorf]

Thanks - can you just take the 7068 as a lump sum & avoid operating a payroll? or do you have to submit certain forms for the salary to hmrc? The last couple of years I've just taken all dividends!

You could take the salary as a lump sum with no NIC or paye, if you took it in the last month of the tax year, my accountant told me I could do that and have nothing deducted.

[ASB]

You could take the salary as a lump sum with no NIC or paye, if you took it in the last month of the tax year, my accountant told me I could do that and have nothing deducted.

Correct, provided you're a director. This is because it is calculated on a cumulative basis. In effect this means you could take 600 in M1, or 1200 in M2 etc.

This was to prevent paying annually and going over reducing thresholds, thus reducing overall bill.

[ASB]

The last couple of years I've just taken all dividends!

In which case you have paid about 1500 pa. Ct that was unnecessary and also lost 2 years pension credit. Depending upon age and ni cont record it might be worth considering voluntary contributions for these years.