@jon_the_accountant: How can a limited company director take over £50,000 from their company and pay just £3,999 in personal income tax? 👀 Here’s the example: 💷 Salary: £12,570
💰 Dividends: £37,700
📈 Total income: £50,270
🧾 Personal dividend tax: £3,999 So how does it work? For the 2026/27 tax year, the standard Personal Allowance is £12,570, meaning the salary can be covered by your tax-free allowance, assuming you have no other income using it. You then have the £37,700 basic-rate band available for dividends. The first £500 of dividends is covered by the dividend allowance, leaving £37,200 taxable at the 10.75% basic dividend rate. £37,200 × 10.75% = £3,999 dividend tax. This can work particularly well for an owner-managed limited company director who is also a shareholder, has no significant other personal income, and whose company has sufficient distributable profits to legally pay the dividends. But remember, this is personal tax only. It doesn’t mean the overall tax cost is £3,999. The company may also have Corporation Tax and employer’s National Insurance to pay, depending on the circumstances. Disclaimer: This is a simplified example for educational purposes only. The most tax-efficient salary and dividend combination depends on your individual circumstances, other income, company profits and available allowances. Always take professional advice before paying dividends or setting your salary. #SmallBusiness #businessowner #taxstrategy #hmrc #entreprenuer

Bad Credit Mortgage Guy :

Corporation tax?

wheelspinshady0 :

But your company will still be paying tax to the government via the corporation tax! Dividends does not count towards expenses of the business so you’re still going to pay tax either way.

reganbrown :

I don't think it's that simple. What about accountancy fees?

Mark Dawson :

Fine, if you don't have any other income.

Fire & Crust Pizza :

Yes true but 46k a year ain’t much to live on now adays!!

gordy737 :

You forgot to mention next years payment on account to HMRC….. 46K is nothing the problem is extracting and profits out of the company after already payment 25% corporation tax !

Simon Whittam :

how come you'd only pay yourself that if you in a ltd company.

Pablo Pringle :

Those were the days before the absolute mess that is IR35 came into force.

Jester :

2 directors = £15800 corp tax on top

Jay Remoh :

46k is no use

Baz :

Wrong you pay tax on dividends host your company from home and your company pays you rent. £12,570 salary £25,000 rent £500 dividend £38,000 tax free!

lenny :

that salary woukdnt keep a garden shed overhead never mind a house.

Dave Preston :

£50k salary is absolutely nothing these days. you dont be come a director of your own company to make 50k a year

spencer :

Don’t forget pensions are a good place to off load your money as a ltd company

Jedinihht :

Yeah ignore the £12,000 corporation tax you had to pay before can take a dividend to pay tax on the dividend lol. Pay tax 2x

craig hibbert :

Darren :

Oversimplified

Strachan’s Tyres :

Yes bro

Starbucks :

Let’s talk

SteveM1263 :

Nah, pay myself more in expenses, pay hardly any tax 😁

phb037 :

Does your salary payment reduce your profit and therefore corporation tax?

Solomon :

why don't u state the costs involved, start-up, registration, annual costs, accountancy, depts, etc

user8956609996386 :

Where’s the Corp tax????

Oldskool B :

You tell Hmrc that 😂😂😂😂

Chris Adair :

What if you earn 70000 plus