With UK Corporate taxes at much lower levels than personal income tax then most of our business clients trade through a limited company.
Dividend planning is essential to balance the needs of the shareholder directors for money to live on with the most tax efficient timing of dividends. The individuals need to ensure that they draw sufficient funds from the company to use up all their personal allowances and basic rate band - to minimise the tax paid at higher rates in later years. Individuals with income over £100,000 may need to plan to avoid losing personal allowances.
An annual dividend planning exercise is key to this planning. All the Account Managers in our accounts team are fully trained on tax planning - and have access to specialists in particularly complex cases.