Dividends are the primary way to take money out of your company.
Dividends are payable after Corporation Tax; all profits are yours to take.
The first £2,000 in dividends is tax-free!
Some dividends are tax-free; you can take £2,000 in dividends without being taxed.
Above that, they are taxed @ 8.75% up to the higher rate tax threshold, £50,270 and then at 33.75%.
Remember you must be making a profit first and pay Corporation Tax before taking any dividends!
It can also be advantageous to add a partner as a shareholder and use their £2,000 allowance. This is achieved by using Alpha shares.
Alpha shares are A,B, C ... Shares. We can set up a B class share for your partner to receive the tax-free Dividends.
Timing is essential too, spread your Dividends over tax years and save tax. B4Bookkeeping can help organise this to ensure tax efficiency.