Tuesday, August 25, 2009

British Tax, and why try harder?

After my annual meeting with my accountant, it seems that as a business owner, it really isn't worth paying yourself more than £30,000 per year as a dividend from your business. Why? Because from next year, anything over this figure will be taxed at 50%.

Bear in mind that profits from the business are already taxed at 21%. So any profit you make get taxed 21%. Then you can pay yourself a dividend of the net profits of anything up to 6k at zero tax, then 24k at 20% tax but to pay yourself anything over the 30k would really hurt.

So you keep the profits in the company account.
Or buy a nice Bentley as a company car which is what I feel like doing.

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