Hello and welcome to the site. Thank you for your question.Taxation of dividendsYou are broadly correct in your statement that the shareholders would potentially end up paying heavy tax on the dividends paid. How much tax you pay depends on the amount of dividend paid as the tax rate is in bands: - for any dividend income falling below the £31,785 higher rate threshold, there is zero dividend tax to pay (as the 10% tax credit cancels out the 10% tax rate). - for higher rate dividend income (between £31,786 and £150,000), you pay 25%(the effective rate). - for additional rate income, your effective rate is 30.56%.More information on dividend tax is covered here
Taxation of profitsAs you have stated LLP profits are subject to income tax and not corporation tax.You would not only pay IT but also Class 4 NI. Any income over £150k would be taxed at 45%.Also share of profits over £42,385 would attract Class 4 NI at 2%. Profits between £8,060 and £42,385 attract Class 4 at 9%.Reinvestment into the business would entitle you to claim capital allowances on those assets acquired based on type of asset. More information on this subject can be found herehttps://www.gov.uk/business-tax/capital-allowances https://www.gov.uk/business-tax/capital-allowances
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