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🚨 Dividends—could there be more tax to pay?

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If your company makes a profit, it’s taxed at 28%. Simple, right? Well… not always.

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Many business owners assume that once their company tax is paid, they’re in the clear.

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But if those profits are left sitting in the company as retained earnings, there’s a good chance you’ll need to pay more tax later—often at 30%, 33%, or even 39% when you eventually take the funds out as dividends.

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That means you could be short by:

✅ 2%

✅ 5%

✅ Or up to 11% if you’re in the top tax bracket!

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This often isn’t explained well, leaving business owners caught off guard when they need to withdraw profits for personal use. On top of the unexpected tax bill, dividend payments can also mean additional accounting fees—another unwelcome surprise.

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What should you do?

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📌 Check your financials – Look at your latest annual accounts. If you see "retained earnings" on your balance sheet, it could mean more tax is due in the future.

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📌 Plan ahead – Ensure you’re prepared for the future rather than just focusing on the current state.

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📌 Understand your options – There may be better ways to structure your income to avoid unnecessary tax headaches down the track.

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Tax planning isn’t just about paying the least amount now—it’s about making smart decisions for the long term.

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If you want to stay ahead of your tax obligations and make informed financial decisions, it's important to plan proactively! Any questions, please let us know

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