Limited company tax guides – Dividends, Corporation Tax, VAT

What is the dividend allowance?

In April 2016, a new ‘dividend allowance’ was created – a nil-rate tax band on the first £5,000 of dividend income. This allowance threshold was short-lived, however, and was cut to £2,000 from April 2018.

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How capital gains tax works

Capital Gains Tax (CGT) is pretty easy to understand: it’s the tax you have to pay when you sell an asset that has grown in value. You will only pay CGT on any profit you made from the sale and not on the overall sum you received.

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How do HMRC tax codes work?

You are assigned a tax code by HMRC so the correct amount of tax can be deducted from your earnings by your employer. Tax codes are typically issued between January and March each year, but at other times as well if there’s a change in your circumstances.

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What is IR35, and will it affect my limited company?

The Intermediaries Legislation (IR35) has been a thorn in the side of limited companies who provide professional services since 2000. Here, we look at what IR35 is, and how to ensure that your company falls outside its scope.

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Entrepreneurs’ Relief – 10% tax on eligible business disposals

To encourage entrepreneurship in the UK, eligible individuals pay a lower 10% rate of Capital Gains Tax on the disposal of business assets, subject to a lifetime limit.

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What is the Child Benefit High Income Charge?

Since January 2013, if you (or your partner) earns £50,000 or more, your family is not eligible to receive the full state Child Benefit entitlement. Here we look at how this charge works, and why it creates a controversial anomaly in the tax system.

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What is the Marriage Allowance and how do you claim it?

Introduced in 2015, the Marriage Allowance enables an individual to transfer a portion of their personal allowance to their spouse or civil partner. If you are eligible, you can claim £238 during the 2018/19 tax year.

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How are limited company dividends taxed?

Limited companies may decide to distribute their retained profits to shareholders. It is a popular method of drawing down funds by directors. Here, we look at how dividends are taxed, and how to ensure that you declare dividends correctly.

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What is VAT, and do I need to register my company?

Almost every consumer in Britain pays it, and it’s a staple talking point during the Chancellor’s annual budget. But what exactly is VAT and do you need to register your limited company for it?

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A brief guide to the Employment Allowance

Beneficial to entrepreneurs who employ others, the Employment Allowance could be worth up to £3,000 each year against your limited company’s Employers’ National Insurance bill.