I have given up trying to get simple information from the UK inlandrevenue website. I don''t have an accountant (too expensive in my experience) and I''m not sure where I stand tax wise. I recently left full time employment, but I am the sole shareholder of a limited company, thats been trading for many years. As I understand it, I can pay myself around £7k a year in dividends without paying tax, and can earn £10k in corporate profits without the corp paying corporation tax. Does the fact that I receive share dividends mean I should get a self-assesment form? (I don''t). In my experience the tax dept seem completely oblivious to me, I don''t want to do their job for them, but I don''t want to get hit with a big tax bill in years to come. Anyone know a good website that would explain whats involved in me doing my own taxes etc on a small UK company? I am also presuming that I can be a shareholder in a company and get ym main form of income that way without having a salary? grrrrrrrr taxes........... http://www.positech.co.uk

You should really seek professional advice.

I think your right about there being 0% corporation tax on profits under £10,000.. BUT you said youd been running for several years, and im pretty sure it was 10% until recently.

Not sure if these would help...
http://www.inlandrevenue.gov.uk/startingup/index.htm
www.startups.co.uk

i had an accountant in those earlier years but i refuse to pay £800+ a year for some suited git to fill out 2 or 3 forms a year. I dont earn enough to justify that kind of expense.

http://www.positech.co.uk

I've been trading 13 years and have never employed an accountant and do my own business accounts and file them every year with the IR.

This year for the first time I filed them online with the IR and it was all completed withing minutes - really !.

Also by doing this I got a £2 grand rebate, and have just been up the pub spending it as it happens

The online return is real easy to fill out (as long as you actually keep a record of your annual accounting close to hand)

Then again I operate (and have done for last 13 years as I said) as a sole trader/proprietor, not as a Limited company... no point really in my case at least.

I've employed quite a few people over the years too and treat them as freelance / sub-contractors (i.e. they pay their own tax in due course).

Worked for for me at least anyway.

Best regards,

Adrian Cummings (Proprietor)
Mutation Software
www.mutationsoftware.com
www.dweebs.info

[edited by - Mutation on September 7, 2002 7:02:00 PM]

[edited by - Mutation on September 7, 2002 7:02:27 PM]

you can get paid either through dividends or through salary or even a mixture of both.
a salary doesnt count to the company profit.. so can be usefull if you just go over a certain tax threshold to reduce it to a lower tax rate. but then you have to deal with national insurance contributions etc.
Also, a dividend can only be paid from company profits, but a salary can still be paid if your making no profit.
You have to pay income tax on both, though at different rates depending on amounts.
An accountant can work out what mixture of salary/dividends leaves you with the most money.. though if your earnings are pretty low it might not make a difference.