Does anyone know if i pay myself solely in dividends i still get a personal allowance of 6035£.?
Although you get a tax allowance of £6035 like everyone else, the taxation of dividends is a special case. Tax is deducted at 10%, and that satisfies Basic Rate tax liability (normally 20%). But the tax is not refundable, whatever other income levels. So if your only income is from dividends, you would not use your personal allowance, but would lose 10% on all income. The only way around it is to take £6035 in salary, and the rest in dividends. Don’t forget directors also get taxed on benefits in kind in employment, so if you get any benefits, your code number may be restricted. If you go up into Higher Rate, tax on dividends is 32 1/2% instead of 40%.
