new Ltd company tax issue

Yuping Registered Posts: 22 New contributor 🐸
Hello everyone,

Can someone help me to work out how much I have to pay taxes this year?!

predicting Net profit before dividend is £ 56,700
if I put £6475 as my salary
and the rest is £50225 will be my dividend,
So how much should I pay for the corporation tax. and how much is the dividend tax?

Please write down your calculation.


  • burg
    burg Registered, Moderator Posts: 1,441 mod
    Couple of questions first

    What is the company year end?

    Has the company registered as an employer and set up a PAYE Scheme?

    A £6475 salary is going to attract employees and employers NIC.

    Are you meaning the £56,700 is before deducting any directors remuneration?

    Do you as the director shareholder have any other income sources including rental properties, interest received, etc?

  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Also, if the £56700 represents money you've actually taken out of the business, technically you can't backdate some of it as salary as dividends. What did you declare on your P35? If you didn't declare salary on this you can't just declare a salary after the event.

    If dividends are being declared and taken within the year, it's very important for the paperwork to be minuted and completed at the time. HMRC can challenge these if this isn't done.

    However if you have a credit balance on your directors loan account then it doesn't matter as much and you can declare one large dividend at the year end, subject to the usual caveats.

    Remember, depending on your other circumstances, you could choose to only extract money from the company up to the max of the basic rate band, meaning the only tax payable would be corporation tax (this assumes the Ltd Co is your only income).

    Rough taxcomp for the company would be

    Profit before tax 56700
    Less salary (if this was actually declared on P35s) 5715 (otherwise you would have incurred NI)
    Profit 50985
    [tax adjustments eg depreciation, capital allowances]
    [assume 0 for this example]
    Tax at 21% 10707
    Net profit 40278 - can be paid as dividend, assuming there wasn't a loss balance on the P&L account in previous years.

    Too late to do the personal tax side of things, but total income would be 5717 + (40278/90 x 100) = 50468.
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