Covered off nicely
Your questions have been covered off nicely, I have just a couple of things to add;
(1) The 10% tax credit on your dividends is notional, and yes, you are entitled to it - all dividends get paid with a 10% tax credit. Just be careful with the calculation - its 10% on the gross dividend payment. So if you paid yourself a £1,000 dividend, your NET income is £1,000. The tax credit is 1/9 of this amount = £111.11. So your GROSS dividend payment (which is what gets used in your personal tax calculation) is £1,111.11. And you see 10% of £1,111.11 is the tax credit amount attached to your dividend.
(2) Re the P45 - yes, so long as your company is registered for PAYE in the first place. So if you have come from perm work, file the P45 you recd through your new company payroll, run your payroll for the duration of your contracting using a salary level that you think is appropriate, and once you have finished, issue yourself a P45 and close down your PAYE account (there are some steps I have skipped here like filing your annual PAYE returns etc);
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Reply to: Questions on dividends
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Previously on "Questions on dividends"
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Originally posted by Gavwar View PostHi I'm quite new to contracting and I seem to come up with more and more questions everyday. These might seem a bit basic, but I would really appreciate some advice.
Originally posted by Gavwar View PostIf I pay the shareholder (me) a dividend out of my companies profits do those dividends need to paid on specific dates in the year (i.e. end of the quarter) or can I chose the dates they are paid ?
Originally posted by Gavwar View PostAm I entitled to any tax credit on the dividend tax? I read somewhere it was 10% as I have already paid corporation tax. Does anyone have any example documentation that can be used to issue a dividends pay out ?
Originally posted by Gavwar View PostFinally, a bit of a side question, as I am the company director and its only employee, if I should take a permanent role in the future can I issue a P45 to myself?
You've also got to register for PAYE, self assessment, perhaps VAT and flat rate scheme, P11d, IR35, annual returns and a whole lot of other stuff. It looks easy to begin with then all these forms and stuff start arriving, you make a mess of it and then get fined or investigated. There are some helpful accountants who post/advertise here, why not get in touch with one of them and sleep easy.
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Originally posted by northernladuk View PostIf you are coming up with so many questions and are stuggling to grap the basics you really would do well to get an accountant and go through this in detail. Not understanding what you know is difficult but you cannot understand what you don't know.
Doesn't help with your question I know but could save you cash in the long run.
Leave a comment:
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Originally posted by Gavwar View PostHi I'm quite new to contracting and I seem to come up with more and more questions everyday. These might seem a bit basic, but I would really appreciate some advice.
If I pay the shareholder (me) a dividend out of my companies profits do those dividends need to paid on specific dates in the year (i.e. end of the quarter) or can I chose the dates they are paid ?
Am I entitled to any tax credit on the dividend tax? I read somewhere it was 10% as I have already paid corporation tax.
Does anyone have any example documentation that can be used to issue a dividends pay out ?
Finally, a bit of a side question, as I am the company director and its only employee, if I should take a permanent role in the future can I issue a P45 to myself?
That's it for today............
Advice greatly appreciated.
Gavin
Leave a comment:
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Originally posted by northernladuk View PostIf you are coming up with so many questions and are stuggling to grap the basics you really would do well to get an accountant and go through this in detail. Not understanding what you know is difficult but you cannot understand what you don't know.
Doesn't help with your question I know but could save you cash in the long run.
You want to talk about it?
Sorry for trolling outside General Mods but it is a bit too out of character.
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If you are coming up with so many questions and are stuggling to grap the basics you really would do well to get an accountant and go through this in detail. Not understanding what you know is difficult but you cannot understand what you don't know.
Doesn't help with your question I know but could save you cash in the long run.
Leave a comment:
-
Originally posted by Gavwar View PostIf I pay the shareholder (me) a dividend out of my companies profits do those dividends need to paid on specific dates in the year (i.e. end of the quarter) or can I chose the dates they are paid ?
Originally posted by Gavwar View PostAm I entitled to any tax credit on the dividend tax? I read somewhere it was 10% as I have already paid corporation tax.
However, if you pay yourself dividends over the 40% tax bracket level you will need to pay an additional 22.5% tax.
Originally posted by Gavwar View PostDoes anyone have any example documentation that can be used to issue a dividends pay out ?
Originally posted by Gavwar View PostFinally, a bit of a side question, as I am the company director and its only employee, if I should take a permanent role in the future can I issue a P45 to myself?
Leave a comment:
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Questions on dividends
Hi I'm quite new to contracting and I seem to come up with more and more questions everyday. These might seem a bit basic, but I would really appreciate some advice.
If I pay the shareholder (me) a dividend out of my companies profits do those dividends need to paid on specific dates in the year (i.e. end of the quarter) or can I chose the dates they are paid ?
Am I entitled to any tax credit on the dividend tax? I read somewhere it was 10% as I have already paid corporation tax.
Does anyone have any example documentation that can be used to issue a dividends pay out ?
Finally, a bit of a side question, as I am the company director and its only employee, if I should take a permanent role in the future can I issue a P45 to myself?
That's it for today............
Advice greatly appreciated.
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