if you are a Limited Company you will pay yourself a mix of salary and dividends typically to optimise for tax. Note, as soon as you pay a salary you have a reporting obligation, so ask your accountant for advice before you do. Visit our Tax Calculator page for guidance on what mix to use. For a Sole Trader it is a little simpler. Simply keep a record of how much you have taken out and move the funds into your personal account.
In short, if you are a Sole Trader, this question is not relevant. For 2020/21 tax year, for a limited company you would normally pay yourself either £8,788 or £12,500 if your business can claim the Employment Allowance. This assumes however that you have no other income. The remaining profit is paid in dividends.
If you're after a bit of advice and not ready to commit to an accountant, you can book a consultation call with us.
Ahead of the call you can fill in a questionnaire to grab the basic details about your business so we can spend our time discussing higher value points. We can cover a range of topics including:
The call is 15 minutes.
Not strict. If we have a couple minutes of chit-chat about recent global pandemics, we'll add this on at the end. We leave a 15 minute buffer after calls to accommodate this.
If you come onboard as a client your fee is credited back to your account.
What is the cost?
The consultation call is £50, including VAT.
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