New to business tax just a simple question

uknick

There is a dividend allowance, £2k for 18-19 per person. Down from £5k the previous year, so, as you can see it's very much at the whim of the government.

When you set up the company, make your wife a share holder and she can also benefit from this.

ChuckMountain

You need to do some sort of business plan ideally with estimates of how much you think you are going to sell. You could do a range of numbers if you are not sure but otherwise you risk giving a 40k job without knowing what you need to sell to pay the bills etc. and is very risky.

Normally there is an element of tax free dividend but for this tax year it has dropped to £2,000. However if you are paying a dividend from a Limited company (you can't pay yourself a dividend as a sole trader) you would have paid 19% corporation tax on that before the dividend is paid.

This is where the business plan and an accountant would be useful as they could crunch the numbers.
(You could use online calculators too) As what you are interesting in (think Amazon) is making it as efficient as possible for tax (and NI), that would generally mean using both yours and your wife's personal allowance via a wage ahead of paying a dividend.

ergot2005

ChuckMountain wrote: »

You need to do some sort of business plan ideally with estimates of how much you think you are going to sell. You could do a range of numbers if you are not sure but otherwise you risk giving a 40k job without knowing what you need to sell to pay the bills etc. and is very risky.

Normally there is an element of tax free dividend but for this tax year it has dropped to £2,000. However if you are paying a dividend from a Limited company (you can't pay yourself a dividend as a sole trader) you would have paid 19% corporation tax on that before the dividend is paid.

This is where the business plan and an accountant would be useful as they could crunch the numbers.
(You could use online calculators too) As what you are interesting in (think Amazon) is making it as efficient as possible for tax (and NI), that would generally mean using both yours and your wife's personal allowance via a wage ahead of paying a dividend.

Thanks fella big help. I'll progress further in setup a lot to do still. And then I'll involve an accountant for proper info guidance.

I'll not be leaving my job just yet the wife will do the packing and sending and I'll have evening and weekends to help also :rotfl: