Jubilee, you are (mostly) on the right track. As the others have said, your tax free salary is an expense which reduces your profit. You then pay 20% CT on your profit and what's left can be paid to the shareholders as a dividend with no further tax to pay, provided the shareholders aren't higher rate tax payers.
Be aware that the calculation of the amount of dividend for tax purposes is a bit goofy and the net dividend the shareholder gets paid is not the same as the gross dividend the tax man uses to determine the tax bracket.
Any additional post tax profit can be retained in the company to be paid out in a quiet year or for a capital distribution when you eventually wind up the company.
You definitely need to get in touch with a helpful accountant, or maybe even two.
If your turnover is £80k then it's a false economy not to have one because you can easily make expensive mistakes in your tax planning.
Be aware that the calculation of the amount of dividend for tax purposes is a bit goofy and the net dividend the shareholder gets paid is not the same as the gross dividend the tax man uses to determine the tax bracket.
Any additional post tax profit can be retained in the company to be paid out in a quiet year or for a capital distribution when you eventually wind up the company.
You definitely need to get in touch with a helpful accountant, or maybe even two.
Originally posted by jubilee
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