The profits generated by UK companies of all sizes can be distributed to shareholders in the form of dividends. Limited company professionals, such as contractors, typically draw down the bulk of their earning as dividends.
Contractor Tax Guides
- Limited company contractors have to account for company tax (Corporation Tax, VAT, Employers' NICs), and personal tax (Dividend Tax, Income Tax, Employees' NICs).
- In reality, a good accountant can take care of almost all of your company's accounting needs.
- If you're an umbrella contractor, then your tax and accounting needs are very simple, as you're taxed as a standard employee. Tax and NI deducted at source.
- How are dividends taxed?
- What is a director's loan?
- The most tax efficient salary for a director
- Limited company expenses your company can claim
- Taxes your limited company must pay
- What is the Employment Allowance?
The optimum salary for limited company directors in 2026/27
If you are a limited company director, what is the most tax-efficient salary to pay yourself in 2026/27? This depends on your eligibility to claim the Employment Allowance.
How much is the tax free dividend allowance in 2026/27?
The dividend allowance means the first £500 of dividends you receive are tax-free. But how does this allowance work in practice in the 2026/27 tax year?
Employment Allowance – is your limited company eligible? (2026/27)
Limited company owners can save hundreds in tax thanks to the Employment Allowance, which allows companies to reclaim up to £5,000 in Employers’ National Insurance Contributions.
How the Flat Rate Scheme (FRS) for VAT works for contractors
The Flat Rate VAT scheme simplifies the way companies have to account for VAT. Here we explain why IT contractors, and other limited company professionals could pay less tax each year by switching to the FRS.
As a director, can I lend money to my limited company?
Can you lend personal funds to your limited company, and how are interest payments treated for tax purposes?
How often should you take dividends out of your limited company?
With dividend tax allowances lower than they once were and tax rates higher, the timing of dividend declarations is more relevant than ever for directors.
Employer PAYE Reference Number (ERN): what it means for contractors
Learn what an Employer PAYE Reference Number (ERN) is, where to find it, and why every limited company contractor needs one when running payroll.
Close company dividend reporting for directors from the 2025/26 tax year
From April 2025, directors of close companies must give HMRC extra dividend details on their personal tax returns. What’s changing? and how to prepare.
How to avoid unlawful (illegal) dividends as a company director
Learn what makes a dividend unlawful, the risks for directors, and how to avoid illegal distributions. Practical guidance, HMRC rules, and real examples.
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