DarkLight mode
News – 18.11.24
International Men's Day - breaking the silence around men's mental health
International Men's Day - breaking the silence around men's mental health … Read more
Insight – 20.11.24
A change in US Presidency: How might it affect your finances?
In this article, we explore the potential economic and financial impacts of Donald Trump's return to power. … Read more
Upcoming event – 10.12.24
Funding innovation in the technology sector: Are the government doing enough?
Join us for an exclusive roundtable breakfast to explore the question of whether the government are doing enough to support innovation in the technology sector. … Read more
Find us quickly
130 Wood Street, London, EC2V 6DL
enquiries@buzzacott.co.uk T +44 (0)20 7556 1200
.jpg)
If you agree to waive your salary before it’s paid, no income tax or national insurance contributions will be deducted. However, if the salary is waived after it’s paid by your employer (for example, the salary is paid and you give it back), the full amount of income tax and national insurance remains due.
Similarly, if the salary is waived on the due date, tax will still be payable, even if you don’t receive it. It’s crucial records are kept to show the agreement made between you and your employer, as well as the date the agreement took place.
To avoid a tax liability, you must waive your right to the dividends before the right to receive it occurs. For final dividends, this date is before they are declared and approved; for interim dividends, it is before the dividend is paid.
In order to waive the right to the dividend income, a Deed of Waiver must be formally implemented, dated and signed by you as the shareholder. If this isn’t completed, you will still be liable to tax at the applicable income tax band for dividends.
Some generous employees increased their level of Payroll Giving during COVID-19, and this practise has continued in many cases. HMRC has noted that employees are still able to make charitable donations. As an employee, you’ll just need to inform your employer of the UK or EU registered charity you would like to donate your wage to. While no income tax will be deducted from the donation, national insurance contributions still need to be made.
If you’re a senior employee or shareholder and are considering waiving your salary and dividends, it’s crucial you do so properly with all the correct documentation. With HMRC already considering the adverse tax effects of not doing so, the result could be costly if not carried out correctly.
For professional advice tailored to your unique circumstances, fill out the form below and one of our experts will be in touch to discuss your requirements and how we can help.
Tax planning and advice for individuals
1
UK resident and offshore trusts
2
Wills and estate planning
3
.jpg)
Family office services
4
EIS and SEIS schemes - generous tax reliefs for investors
Contact us
6
