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Tax Insider Report: Tax Efficient Ways To Extract Cash From Your Company

17th May 2018
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The Report starts by looking at some of basic and most straightforward methods and progresses through more sophisticated ideas. By the end of the Report, you should have a comprehensive view of the ways to extract profits from your company in a tax-efficient manner.

The sections will cover:

  • Salaries – as a director of the company, you are entitled to be paid a salary for your work – and so are any members of your family who work for the company. At first glance, salaries (which attract income tax and NIC via the PAYE system, together with employer’s NIC at 13.8%) are an expensive way to take money out, but as we shall see, they definitely have their place and there is a lot to be said for taking a small salary at least equal to the lower earnings limit for Class 1 NIC purposes.
  • Benefits in kind – profits do not need to be taken out in cash form and can be extracted in kind instead. Some benefits in kind, such as mobile phones, childcare, and even parties can be provided tax-free!
  • Dividends – these are paid to shareholders in a company and are one of the main tools of tax planning for companies, but they have their own problems, too. The taxation of dividends was fundamentally reformed from 6 April 2016 and the tax savings associated with taking profits as dividends were generally reduced as a result. However, the lower tax rates that apply to dividends mean they are still a tax-efficient exit route.
  • Pension provision – paying money into a pension can be tax-effective due to the tax reliefs that are available. Taking advantage of employer contributions to a pension scheme can be a useful way to take money out of a company.
  • Loans – although tax liabilities generally arise where a company lends money to shareholders, employees, or directors, there are some useful exceptions to this rule. The techniques using loans to provide access to company profits vary from very basic planning ideas to complex arrangements.
  • Capital taxation – this may come into play when looking at ways of building up a ‘tax-free’ nest egg in the company at the start of its life, and also when looking to extract the cash from a company at the end of its existence at a rate of 10% tax or less.
  • Spouses and civil partners have additional tax planning opportunities denied to single folk.
  • Rent and sales of assets to the company – these provide further ways of getting money out of the company.
  • Other ideas – the final section will look at some of the more complex structures that can be used to maximise the tax efficiency of a business involving a limited company.

Go here to purchase the report:

Tax Efficient Ways To Extract Cash From Your Company

Tax Efficient Ways To Extract Cash From Your Company

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