Many see cash available in their bank and assume they can take it as dividends 🫣
But dividends can only be taken from the post (corporation) tax profit figure (or retained profits from previous years). That’s not to say you can’t take money throughout the year, as we all need money to live on right! 💷
It means you have to have accurate, up-to-date accounts and the ability to work out what your estimated corporation tax bill would be at that point.
If there’s anything left, you can take some. 😊
Don’t forget to set aside the income tax element of the amount you take i.e 8.75%, 33.75% or 39.35%, depending on what tax band they fall into.
That way there are no nasty tax surprises come January!
Obviously, your cash and profit figures are rarely the same as each other, so you need to have enough of both before you take dividends.