Saw a clever tax tip online?
Here’s what to do before you act on it
Social media is full of tax tips. Some are genuinely useful. Most are technically true, but missing the context that makes them actually work. A short video has no room for the conditions and the small print, and with tax, the small print is usually the whole story.
Here are three you have probably seen scroll past.
“Pay your kids through your company.”
There is a legitimate version of this. But the clip rarely mentions that children under 13 cannot be employed at all, that children aged 13 to 16 need a permit from the council, or that HMRC will only accept the cost if it is a genuine wage for genuine work at a fair rate. Get those bits wrong, and a tip meant to save you money can end up costing you more.
“Buy your car through the company.”
Sometimes sensible, often not. A company car is treated as a perk you are taxed on personally, and for most petrol and diesel cars, that personal tax bill can wipe out the savings. Electric cars are treated far more kindly at the moment, but even that is slowly tightening. The answer really depends on the car and on you.
“Take everything as dividends, not salary.”
Dividends are still taxed more lightly than salary, but the gap narrowed when the dividend tax rose in April 2026. The basic rate went from 8.75% to 10.75%. You can also only pay dividends out of actual profit, and a small salary often still makes sense to protect your state pension record. “All dividends” is rarely the full picture.
Notice the pattern. Every one of these is true in the right circumstances and a problem in the wrong ones. The clip cannot tell you which one you are in, because a tip in a video is the same for everyone who watches it. Your business is not.
What is right for a sole trader with a side income is different from what is right for a limited company director, a CIC, or a freelancer juggling two income streams. The detail that makes a tip work, or makes it a problem, depends entirely on your situation. And that is the part no caption can cover.
So we are not saying ignore what you see online. A good tip can be a great prompt. We are just saying, bring it to us before you act on it. We will tell you honestly whether it applies to you, how to do it properly if it does, and where the traps are if it does not.
Our Advice Hour is exactly the right place to start.
No question is too small, and we will not make you feel silly for asking.
We are also talking about this in our newsletter this month, including five questions to ask before you act on any tip you see online.
Here, when you need us,
3 Little Birds Finance
