Director Pay and Dividends
23 articles on director pay and dividends for UK limited company directors, contractors, sole traders and small businesses.
Director Pay and Dividends
Dividend tax rates 2026/27 rose to 10.75% (basic rate), 35.75% (higher rate), and 39.35% (additional rate). The dividend allowance stays at £500. This article models the specific scenario where dividends push a director into a higher tax band for savings income, costing more than expected.
Director Pay and Dividends
The standard advice for 2026/27 is a salary of £12,570 (using your personal allowance) and dividends up to the basic rate band. But the numbers shift depending on your company's profit level, whether you have employees, and your spouse's tax position. We walk through the calculations, the pitfalls, and when to deviate from the norm.
Director Pay and Dividends
From 6 April 2026, Finance Act 2026 raised the dividend ordinary rate from 8.75% to 10.75% and the upper rate from 33.75% to 35.75%. The additional rate stays at 39.35% and the dividend allowance stays at £500. This is the 2026/27 edition of our dividend rates coverage: exactly what changed, what it costs at typical director profit-extraction levels, and the timing and planning points that follow from a two percentage point rise.
Director Pay and Dividends
If you run a limited company and receive child benefit, dividends from your company count toward the adjusted net income that triggers the High Income Child Benefit Charge. This guide explains the director-specific planning levers: pension contributions, Gift Aid, and dividend timing, and shows worked examples of how each reduces or eliminates the charge.
Director Pay and Dividends
A direct comparison of paying yourself a bonus versus a dividend as a limited company director in 2026/27. We work through the real tax numbers on both sides, including corporation tax, employer NI, and dividend tax. You will see which route leaves more cash in your pocket.
Director Pay and Dividends
A bonus is tax-deductible for the company but triggers income tax and National Insurance. A dividend is paid from post-tax profits but faces lower personal tax rates. This article compares both routes with real 2025/26 figures.
Director Pay and Dividends
You can pay a dividend to a spouse who is not an employee or director, provided they own shares in the company. But HMRC’s settlement legislation can reallocate that income back to you if the shares were gifted solely to reduce tax. Here is how to structure shareholdings properly, avoid the settlement trap, and make alphabet shares work for your family.
Director Pay and Dividends
Many directors ask if they can use company funds to pay their personal tax bill. The answer is no. Here's what happens if you try, and the correct way to handle your personal tax liabilities.
Director Pay and Dividends
You cannot legally declare a dividend from a loss. We explain the rules on distributable profits, what happens if you do it anyway, and the practical steps to take if your company has no retained earnings.
Director Pay and Dividends
Taking a dividend before the board minutes are signed is surprisingly common. It creates a legal and tax risk that can be fixed, but only if you act correctly. Here is what you need to know about the timing of dividend paperwork.
Director Pay and Dividends
A director's loan account records money owed between you and your limited company. If you take more out than you put in, the company must pay S455 tax at 33.75% (for loans made in 2025/26) or 35.75% (for loans made on or after 6 April 2026) unless you repay within 9 months and 1 day of year end. This guide covers everything from setting it up to avoiding the tax traps.
Director Pay and Dividends
Dividends must be paid from distributable profits. If your company made a loss in the current year, you cannot declare a dividend unless retained profits from prior years cover it. Paying a dividend from a loss is illegal and triggers serious tax and director liability consequences.