What is the best way to take money out of your Limited Company? Dividends or Salary? What is best?

The phrase 'one size does not fit all' definitely springs to mind here!

A lot will depend on how much profit your company is making and what your long term plans are. This is why it is important to talk to an accountant who knows the different taxes and how they will affect your individual circumstances.

Usually a Director will pay themself a small salary (that is both tax efficient for them and for the Company) and then take the remainder as Dividends, which will be declared on their personal tax return. The amount that the Directors Salary is set at is important, as it will affect not only the tax and national insurance that the individual has to pay, but it will also affect how much Employer's National insurance the company will potentially pay too.

As well as ensuring that you are not paying more PAYE, dividend or corporation tax than you need to in the short term, there are other longer term things to consider as well, like pension contributions your national insurance record.

So, Dividends or Salary? What is best? To discuss your options, contact one of the team today on 07700 162225

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