Why pay dividend tax?

Corporate structures Alexander Accountancy Burton upon Trent

Changes in the way dividends are taxed have made it harder for business owners to extract funds from their limited companies. This year the zero rate band has been reduced to £2,000 and higher rate tax payers are having to shell out 32.5% personal tax in addition to the Corporation Tax they have already paid.

Business owners can be left with little over half of their marginal profits at that level, and often the money is earmarked for other investments or projects, not just used as disposable income.

So what if there is another way?

There are ways the re-investment or project finance can be extracted without paying the extra 32.5%, free of the risks involved with Enterprise Investment Schemes or similar and with fewer restrictions than trusts. Simple structures and processes that are safe and keep the funds under your control, to be used how you wish and without an additional tax burden.

Corporate Structuring

Limited company structures are well established and governed by fully developed legislation, but not traditionally thought of in the SME market. However with more advice and information freely available this is changing and Alexander Accountancy are helping to bring the benefits to a wider audience.

In addition to not having to pay the dividend tax other benefits of using corporate structures can include protecting the existing business, financing joint ventures, deferring private income, moving trading profits in to investments, passing on wealth and reducing your future Inheritance Tax liabilities.

Want to know more?

We are happy to carry out bespoke assessments to see if corporate structuring is relevant as part of our free reviews. If this is something you would like to take advantage of please telephone 01283 743851 or email info@alexander-accountancy.co.uk to arrange a meeting.