Understanding of dividends

Please note that this article refers to companies in the UK.

Dividend is a common way to pay the company's shareholders. There may be temporary dividend payments and final dividend payments and the company must have sufficient profit from the dividend payment.

How much can you pay to shareholders in the form of dividends?

If a company changed £ 100,000 in a particular fiscal year and the cost (wages, fees, etc.) of tracing the transaction would amount to £ 50,000, the amount of business debt (tax) would be 10,500 pounds (with 21% as a corporation tax rate ). This would leave £ 39,500 for dividends.

If ten shareholders were in business and they all had the same number of shares, they each received 3,950 pounds in dividends if all the money was used.

Dividends are paid on an item, because the more things you own, the more your dividend will be (compared to other shareholders of the same type in the same company).

What is a deposit certificate?

In the event of a dispute, certificates shall be raised and issued to shareholders. This is usually done by mail. This shows the size of the dispute and the amount of tax credit. The tax credit shows the amount of taxes paid by the company on behalf of shareholders. Dividend payments are paid after tax (at basic rate). If you are a higher taxpayer, you may receive additional tax to pay on the dividend you have received.

Source by John Dixon

Leave a Reply

Your email address will not be published. Required fields are marked *