So, I know this is a question probably for my accountant, but I want to do a little research myself. What is the most tax efficient way to extract earnings as an owner..?
I have a small startup that has a good revenue stream now and I want to start paying myself. The amount of earnings I want to take would put me into the highest tax bracket by default. What options can I use to try and extract earnings efficiently..?
Expanding the question based on the answers that have come in. It seems a good hypothetical structure would be something like this:
1) £7,475 PAYE (0% tax) + is a corporation expense (20%/26% tax saved) 2) £27,525 PAYE (20% tax) + is a corporation expense (20%/26% tax saved) 3) £35,000 Dividends (10% tax) - is not a corporation expense (0% tax saved) Overall tax: 12.8% (£9,005) - corporation tax saved: £9,100 (let me know if this needs editing) (still need to add NI to the above)
Are there any additional vehicles that can be used to extract earings efficiently..? What about valid expenses, pensions, etc..?