How to Pay yourself from a Limited company (2021)
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- เผยแพร่เมื่อ 22 ธ.ค. 2024
- How to PAY Yourself as a limited company director AND how to pay yourself tax efficiently as a limited company Shareholder.
In this video I will show you how Directors Salary should be paid from your own Limited (Ltd) company in 2020/21 and in 2021/22. This methods with have lots of a Tax savings for your Business.
Paying yourself dividends VS Paying yourself salary - Lets look at the Tax Savings on why you should pay yourself a dividend and why you should not pay yourself the full salary.
Income tax is charged on your sources of income - in this video we will see how you can save income tax by paying a dividend. In the UK you can pay less tax on your earnings by taking out a Dividend instead of a Salary. In this video we will do a comparison of Salary VS Dividend. In this video you will learn How you can save Income Tax from your own Limited company by paying dividends.
National Insurance Contributions paid by the Employer can become an additional cost to the Payroll. Watch this video to see how National Insurance is calculated and paid. In this video we will see how you can Save Money by not paying the National Insurance Contribution for Employers if you pay yourself a dividend.
Dividends are paid from the Company Profits - in this video we will see how dividends will be calculated and how are dividends taxed. What are the tax rates for Dividends. How you can reduce Income Tax and how you can save Employees National insurance contributions and how you can save Employer National insurance contribution by paying yourself in dividends from your own business. You will learn why is dividend a more tax efficient way of paying yourself from a Ltd company.
Corporation tax is paid on the profits of the business. In this video we see how UK corporation tax is calculated. How you can save Income Tax by paying Corporation tax instead UK. How you can ave tax savings in a limited company by paying corporation tax.
The figures in this video show the tax savings using the dividend tax rates, Personal allowance rates, corporation rates, income tax rates, National contribution rates for 2020/21 but can also be used as a guide for 2021/22
Let me know in the comments below how you pay yourself to use up all the Limited company savings and Ltd company tax reliefs and UK Tax reliefs for individuals.
Please do let me know if you want me to discuss any other KEY areas in TAX SAVINGS for limited company and sole traders.
Disclaimer:
All my videos are for guidance, education and purely for sharing knowledge of my experience with the purpose to help you understand accounting, business & finance. They in no way constitute specific advice to your specific circumstances. As accounting is and can be a very subjective issue based on your own individual circumstances so you are always recommended to seek professional assistance to tailor these general guidelines I provide more specifically to your own circumstances.
#howtopayyourself #dividendvssalary #taxsavings
CORRECTION: At 1:52 I mention about the reduction of Personal Allowance after £100,000. However i noticed i made an error while mentioning the upper limit, I was meant to say it is completely finished after £125,000 NOT £150,000. It reduces £1 for every £2 above the £100,000 mark so it will finish at £125,000 for an allowance of £12,500. In the future years when teh personal allowance will increase you just have to remember to multiply the PA figure by 2 and add that to £100,000 this will give you the figure where your personal allowance will completely finish. Apologies for the mistake 🙂
Very clear and concise method of explanation! As a LTD I failed to grasp the accounting methods quick enough! Thank you
Thank you! Glad this helped you and hope my future content can be informative too.
Very well informed Thanks alot Brother it will help
Me alot m just registered my first Business in UK.
Thank you, glad it was helpful for you. Good Luck with your business!
Awan . It was nice lecture indeed.
Thank you, i am glad you liked it🙂