Salary vs Dividends: A newbie question

MaxiRobriguez

In your sums you state avoiding corporation tax ADDS to the capital value. It doesn't, it just stays where it is, so your less 20% income tax calculation would be on £30k, not £35,700.

You've then stated taking dividends next year, but have failed to account for corporation tax by not taking the dividends this year, so your dividend calculation would start at £24,300, not £30,000.

As others have said, the optimal solution is likely to be a mixture of salary and dividends (in this financial year).

Prism

Once you have decided how much you would like to pay yourself each year (salary and dividends) then either leave the rest in the business or pay it into your pension.