Is there a more efficient way of taking income from your company?
For most Company Directors, taking a salary higher than the National Insurance threshold is not a particularly tax efficient way to receive renumeration from their company. Taking income as dividends has always been a better choice. However, from April 2016, dividends over £5,000 per annum are taxed at 7.5% for a basic rate tax payer and 32.5% for higher rate tax payers. This means that it’s worthwhile looking at other ways to receive income.
What might your options be?
It might be possible for you to receive a benefit in kind from the company which you would otherwise pay for from your own income. A carefully selected benefit that is tax deductible for the company will reduce the company’s corporation tax bill whilst providing you with a product or service you would normally pay for yourself.
An example of such a benefit used to be the company car but most of us realise that the financial advantages of the company car have been eroded by successive Governments. However, there are other benefits that the taxman will allow, such as pension contributions and a mobile phone, for example.
Tax efficiency is just one area that a competent accountant should be helping you and your business with. It simply isn’t enough for an accountant to produce annual accounts and tax returns for you when you may be wasting money by being less tax efficient than you need to be.
Why not contact us to see how Brooks Accountants could help you and/or your company be more tax efficient?