Knowledge Centre Category: Companies Limited by Shares

Home » Companies Limited by Shares

Owner-Manager

An owner-manager is an individual who both owns and runs their own limited company, typically drawing income through a combination of salary and dividends. Green Accountancy regularly advises owner-managers on the most tax-efficient way to structure their remuneration given current tax rates and their personal circumstances.

Dividend

A dividend is a payment made by a company to its shareholders from post-tax profits, and is a common way for owner-managers to draw income from their business. Unlike salary, dividends are not subject to National Insurance, though they must only be paid when sufficient profit reserves exist.

Ordinary Shares

Ordinary shares are the standard class of share in a limited company, carrying voting rights and entitlement to dividends from profits after any preference shareholders have been paid. Under EMI and EIS schemes, shares must be ordinary shares with no preferential rights to dividends or assets in order to qualify.

Dividend Allowance

The dividend allowance is the amount of dividend income an individual can receive tax-free each year, currently £500 for the 2026/27 tax year. Any dividend income above this amount is taxed at dividend tax rates through self-assessment.

Dividend Tax Rates

In 2026/27 dividends are taxed at 10.75% (basic rate); 35.75% (higher rate) and 39.35% (additional rate). Dividends are taxed "last" i.e. all other income sources are set against personal allowances and tax bands, with dividends taxed at the highest rate of tax that you pay.

Enterprise Management Incentive (EMI)

An Enterprise Management Incentive scheme is a government-approved share option arrangement designed to help smaller trading companies attract, motivate and retain key staff in a highly tax-efficient way. Green Accountancy advises companies on EMI scheme eligibility, setup and the associated annual HMRC reporting obligations.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme is a government initiative offering 50% income tax relief to individuals who invest up to £200,000 in very early-stage trading companies. It is designed to help small, new businesses raise their first round of capital by making investment significantly more attractive to potential backers.

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme offers tax relief to individuals who invest in new shares of qualifying early-stage trading companies, including 30% income tax relief and Capital Gains Tax exemption after three years. It is a powerful tool for growing businesses looking to attract investment from individuals who might otherwise be deterred by risk.

Payroll

Payroll is the process of calculating and paying directors' remunertion and employees' wages and salaries, deducting income tax and National Insurance through the PAYE system, and reporting these to HMRC. Green Accountancy provides a fully managed payroll processing service for companies, charities and other organisations.

Year-End Planning

Year-end planning is the process of reviewing a company's financial position before its accounting period closes in order to make the most of available tax reliefs and allowances. Green Accountancy contacts clients proactively ahead of both their company year-end and the 5 April personal tax year-end to discuss opportunities such as dividend timing and pension contributions.