Pays Dividends Ltd

Lovely testimonial today at BNI Trailblazers from Mitchell Welsh at Kingfisher (Midlands) Ltd 😀 Thanks Mitch!

Well, there’s a few of these and you’re welcome to view them all on this link https://www.gov.uk/government/publications/spring-budget-2024-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances

But some ‘Highlights” below;

Standard tax allowance for 24-25 tax year is £12,570

Income Tax 20% up to £37,700 taxable after allowing for personal allowance

40% from £37,701 to £125,140 and then 45% above that

National Insurance for Employees – Nil up to £12,570 and then 8% above that up to £50,270

National Insurance for Employers – Nil up to £9,100 then 13.8%

Employment Allowance is £5,000 but you are not eligible if you only have 1 employee paid above £9,100/annum and that employee is a Director

Dividends tax free allowance is now only £500/annum with 8.75% tax on dividends above that for a basic rate taxpayer and 33.75% for a higher rate tax payer

Capital Gains Tax – Allowance is now only £3,000/annum with an 18% tax rate for a basic rate taxpayer and 24% for a higher rate taxpayer if it’s for residential property.

If it’s a capital gain on anything else, those rates are 10% and 20%

Corporation Tax – The basic rate is now 25% but only on profits above £250,000, with a small profit rate of 19% up to £50,000. There is a margin rate of relief in between those 2 levels. Be aware, though if you have Associated companies, these thresholds are divided by the total number of companies associated.

The threshold above which you now must register for VAT is £90,000 with a de-registration level of £88,000.

If you are in doubt on any of these and want to talk to someone, please give either of us a call – Nic on 07985 645087 or Tim on 07875 410466

Annex A: rates and allowances We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.

If you own property, this could either be individually or through a Limited Company. If you have the 1 property you own and rent out, you’re probably better owning this individually and paying Income Tax, as long as you’re a basic rate tax payer.

However, if you have more than 1 property or intend to grown your portfolio, it’s better to operate through a Limited Company. Why? Well, if you have 2 or more properties, you may be paying some tax at the higher rate of 40%, whereas operating under a Limited company, profits are taxed at 19% up to £50,000 and 25% over £250,000 with a marginal rate relief in between – but all less than the 40% you would pay.

There’s a but (of course!) as if you own properties now and want to sell them to the Limited company you could incur stamp duty, so look at purchasing only new property through the company instead. There is also no tax allowance under a Limited company, whereas there is if you own it yourself. Finally, mortgages may be more expensive under a Limited Company, so a few things to consider

If you are in doubt and want to talk to someone, please give either of us a call – Nic on 07985 645087 or Tim on 07875 410466

If you have an employee and they are paid more than £6,396/annum then you should apply for a PAYE reference and run a payroll, keep records and send regular submissions to HMRC. You must also pay PAYE and National Insurance ,due by certain deadlines.

If you are the sole Director of a Limited Company and not paying yourself a salary, then there is no requirement to do this.

Let’s suppose you are a Director and Shareholder in your Limited Company, paying yourself a basic salary and taking some dividends, then you will also be paying Corporation Tax. There are ways you can reduce your Corporation Tax but still benefit yourself, such as having the company pay in to a pension scheme for you. There are limits and you don’t want to pay more in than you have profits before tax if you have

taken dividends but please talk to a Financial Advisor about which pension scheme and then to either of us about how much and when!

Nic on 07985 645087 or Tim on 07875 410466

So what’s the difference and how do I know which is which?

Generally, the rule of thumb is that if the item being purchased has a useful life of more than 1 year, then it’s capital and you would depreciate the cost over the useful life of that asset. For example, a laptop might be between 3 and 5 years or a piece of machinery might be 5 to 20 years.

Repairs would usually be expensed in the year, unless it’s to improve a property that is already capitalised.

If you are in doubt and want to talk to someone, please give either of us a call – Nic on 07985 645087 or Tim on 07875 410466

Well, there’s a few of these and you’re welcome to view them all on this link https://www.gov.uk/government/publications/spring-budget-2024-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances

But some ‘Highlights” below;

Standard tax allowance for 24-25 tax year is £12,570

Income Tax 20% up to £37,700 taxable after allowing for personal allowance

40% from £37,701 to £125,140 and then 45% above that

National Insurance for Employees – Nil up to £12,570 and then 8% above that up to £50,270

National Insurance for Employers – Nil up to £9,100 then 13.8%

Employment Allowance is £5,000 but you are not eligible if you only have 1 employee paid above £9,100/annum and that employee is a Director

Dividends tax free allowance is now only £500/annum with 8.75% tax on dividends above that for a basic rate taxpayer and 33.75% for a higher rate tax payer

Well, there’s a few of these and you’re welcome to view them all on this link https://www.gov.uk/government/publications/spring-budget-2024-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances

But some ‘Highlights” below;

Standard tax allowance for 24-25 tax year is £12,570

Income Tax 20% up to £37,700 taxable after allowing for personal allowance

40% from £37,701 to £125,140 and then 45% above that

National Insurance for Employees – Nil up to £12,570 and then 8% above that up to £50,270

National Insurance for Employers – Nil up to £9,100 then 13.8%

Employment Allowance is £5,000 but you are not eligible if you only have 1 employee paid above £9,100/annum and that employee is a Director

Dividends tax free allowance is now only £500/annum with 8.75% tax on dividends above that for a basic rate taxpayer and 33.75% for a higher rate tax payer

Annex A: rates and allowances We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.