Ammount to take as a dividend?

UKSBD · #1 (**permalink**) 30-08-2008, 11:50

What is the limit to how much can be paid in dividends in a year?

And what is the best ammount to pay, assuming I am paying myself £5400
a year in wages?

Also what is classed as a tax year, the companies tax year or the PAYE
tax year?

Thanks

jbladeus · #2 (**permalink**) 30-08-2008, 12:34

Ans to a and b) There's no limit to the dividend you can pay. However you need to strike a balance between the business' working capital needs and the amount being paid out as dividend to shareholders.

James Smith · #3 (**permalink**) 30-08-2008, 14:00

hmm thats not quite right.

What determines the leval of dividends is the level of distributable reserves - that is to say accumulated company profits after allowing for tax. You will probably need your accountant to help you determine this to start with to show you how its done.

Your company tax year is completely separate from your personal tax year although it may be the same (this is actually best avoided as it cuts down on opportunities for tax panning).

What is the "best" amount for you to take will depend entirely on your circumstances. Again back to your accountant for that one.

Hope that helps

Regards,