???? The most tax-efficient way to withdraw money from your limited company in the UK will depend on your specific circumstances. However, here are some commonly used methods:
1️⃣ Salary (????): Paying yourself a salary from the company can be tax-efficient. You’ll need to register as an employee, set up a payroll system, and deduct income tax and National Insurance contributions (NICs). However, you’ll also benefit from personal income tax allowances.
2️⃣ Dividends (????): If your company has sufficient profits and you’re a shareholder, you can take dividends. Dividends are subject to different tax rates and thresholds, and you’ll have a tax-free dividend allowance. Remember to consider any tax implications, such as the dividend tax and potential higher tax rates for larger dividend amounts.
3️⃣ Pension contributions (????): Making pension contributions can be tax-efficient, as they can be deducted as a business expense, reducing your corporation tax liability. Personal contributions may also qualify for income tax relief.
4️⃣ Director’s loan (????): You can take money out as a director’s loan, but it should be repaid within a specific timeframe (usually nine months and one day from the end of the company’s accounting period). Failure to repay the loan can result in additional taxes.
5️⃣ Capital gains (????): If you sell or transfer assets owned by the company, such as property or investments, you may trigger capital gains tax. Proper planning and advice are crucial to ensure tax efficiency.
Get in touch with us today for personalised advice based on your specific circumstances and the latest tax regulations. ????????????
