Dividends are a distribution of Company profits and do not affect the amount of corporation tax payable.
- Provided the Company is trading profitably and funds are available, dividends may be declared at any time during the Company’s financial year. Under IR35 there will usually be no funds available for dividend declaration.
- It is necessary to complete a Dividend Declaration Form each time a dividend is declared.
- Dividends come to the shareholder with a "tax credit", so there is no additional tax to pay unless your total income (i.e. salary, dividends, interest etc.) exceeds the basic rate threshold.
- Dividends are paid in proportion to shareholding. It can be advantageous to allocate a share(s) to your spouse if he/she is a lower/basic rate tax payer.
