This page lets you assess how much Tax and National Insurance can be saved by issuing dividends rather than salary to shareholder directors.
Enter the approximate Pre-Tax Profit for the Company in the Pre-Tax Profit box on the right followed by your current Salary and a lower Salary to test. Lower salaries produce greater savings as up to 23.8% of salary can go in N.I. Around £6,000 seems to be most tax efficient. Dividends make up for a low salary. The Dividend as calculated provides an estimate of the total Net Dividend that can be taken before 40% tax is due. For joint shareholdings the Dividend can be doubled. By restricting the amount of Dividend taken higer rate tax can be avoided. All figures assume there is NO other taxable income to be taken into account.
