The short answer for business owners who are basic rate taxpayers is that paying dividends is nearly always the better option, regardless of changes in the Corporation Tax rate the company pays. This is because dividends do not attract NICs and offer tax advantages for lower rate taxpayers.
However, unlike paying salaries, the business must be making a profit (after tax) to pay dividends.
If you would like more information, please contact your accountant on 0113 2864486.
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