[jeremy evans]

Dividends aren't tax free you still have to pay tax on your income if thats a salary or dividends. Their used to be a tax perk on the first £10000 of dividends but that was stopped a few years ago. I used to be ltd on my old business but i wound the company up on my accountants advice as the benefits weren't enough in my case to outweigh the extra paperwork and hassle involved.

[Craig Trevain]

You can only take dividends out of profit, if the profit is  50000 you can only take 50000,  it's not the directors that can have dividends, it's the shareholders ( sometimes a difference)

[Sean Dyer]

dividends are not tax free true. But they are subject to different tax rates than other income. So under 35k income for the year you only pay ten percent on dividend income however there is a ten percent tax relief on dividend income so under 35k it is effectively tax free. So if you draw 5k a year as an employee of your own company you pay No ni or tax. Then 30k in dividends is tax free. Only tax paid would be 20 percent corporation tax by the company. Thats how i under stand it. Dont think im wrong :-)

[Craig Trevain]

You have to pay yourself enough paye to pay ni, can't not pay ni, you just pay less than if you took all money as paye.

[Sean Dyer]

You have to pay yourself enough paye to pay ni, can't not pay ni, you just pay less than if you took all money as paye.

Well even in you paid yourself your personal allowance 8k next year , and wife did same , thats very little ni and 16k tax free plus dividends.... ie about 35k per person and only a bit of ni , probably a couple of hundred £ per person

There is a benefit to being limited

Its just not what it was for the hassle

Its all here
http://www.hmrc.gov.uk/newbusinesses/iwtset-up-as-a-limited-company.shtml

[jeremy evans]

Might be wrong but i thought the 10% tax relief on dividends got stopped a long time back.

[northstar161]

I've heard that accountancy fees go up: about £500 a year. Also you might have to have employees liability insurance which can increase costs.

[Roy Cauldery]

Less tax. You don't pay NI. Need to be earning over 40 000 roughly to make it worth while because accountancy fees increase dramatically and paperwork. If earning enough profit it will save you a fortune.

Damn - I knew my partner doing her AAT4 would work out for me in the end- kkeerrchiiing!!!£££££

[Sean Dyer]

Might be wrong but i thought the 10% tax relief on dividends got stopped a long time back.

Doesnt say that on hrmc?

[Dean Taberner]

We are LTD,

There a various tax saving legal holes apparently,

I wouldnt know that though as im solely focused on keeping the glass clean.