Dividends Vs Salary UK Pre During and Post Pandemic
Dividends Vs Salary UK Pre During and Post Pandemic
Dividends Vs Salary UK The Debate
Many business owners found the most tax efficient way of paying themselves pre pandemic was to pay themselves a small basic salary then top up by paying themselves with company dividends from profit. These directors and business owners may have suffered during the pandemic as they are only allowed to be furloughed on basic salary not total income. The result is that during the pandemic they have not been able to claim back as much furlough pay as their peers paid with just salary.
Pre pandemic business owners choosing salary and dividends remuneration would avoid paying tax. They may not pay any tax at all on the basic salary drawn and possibly avoided the company paying National Insurance. The end result pre pandemic is that the state received less money in tax and national insurance that pays state benefits and for the cost of the NHS.
During the pandemic it meant that some business owners were not entitled to as much benefit possibly even were not entitled to any benefit whatsoever. In other words they were faced with no income at all from the business or the state. If you use legal tax avoidance tools prepandemic to reduce funds the state could receive and needs should you be entitled to benefits the state could pay but does not?
That is the subject of the latest online UK Business Online Discussion and Debate.