Budget - Corporation tax vs dividends vs salary

[9005rpm]

Hi all,

For owner managed businesses I think that it is still (just) currently better to pay a small salary and then take other proceeds via dividend. This means more corporation tax vs taking all proceeds as salary, but my accountant tells me that it is still better than salary only.

My question is, with the increase to corporation tax, when might the pendulum swing such that it is better overall to take mostly salary and only a limited salary.

Does anyone know of a website that allows you to plug in different scenarios to see which might work best?

[Eric Mc]

Give people a chance.

The calculation to work this type of thing out has always been fairly complicated.

With the marginal rate of Corporation Tax between profits of £50,000 and £250,000, it will be an even more complex calculation.

[doogle83]

It sounds like you have 2 years to work it out

Also depends on the size of your business as Rishi referenced that corporation tax increases will be tapered from no change under £50k up to 25% being applicable to businesses making over £250k profit.

Edit: What Eric said!

[loafer123]

My back of a fag packets says divis are about the same as salary at £100k once you take NI into account, but that at £250k it pays you to receive as salary, not divis.