Accessing your company profits
Constantly changing tax rules
When business owner-managers take profits from their business, it isn’t surprising that they want to do so in the most efficient manner. There are various ways you can minimise both tax and National Insurance Contributions (NICs).
Of course tax is not the only issue. You will almost certainly need to draw a basic level of income to cover your personal requirements, regardless of the cost, and it will also be necessary to retain sufficient profits within the company to cover its future needs.
The tax rules are constantly changing. Just because you have drawn profits in one way in the past does not mean that this continues to be the best approach. Company tax rates have fallen considerably in recent years, but the taxation of dividends has become more punitive, with significant increases to the rates of tax on dividends and the abolition of dividend tax credit.