Dividends, Salary and Other Tax-efficient Ways to Extract Profit
Tax-efficient ways to extract profit from your business
A Tips & Advice book about...
In a nutshell
This book is your go-to guide to developing a tax-effective profit extraction strategy. It shows you the most tax-advantaged and legally safe ways to get that hard-earned profit out of your company. You’ll see how each profit extraction method might work for you and which taxes come into play. This latest edition has been fully updated to include the tax rates and thresholds for 2023/24.
In detail
You'll find 19 profit extraction methods - everything from dividends to employer pension contributions. We cover each method in a structured way and tell you, in simple language:
- What's involved - what you have to do
- The direct tax consequences for you and your company
- The VAT implications
- The pros and cons of each method
We also provide you with a worked example explaining what it costs your company and the net amount you'll be left with.
Plus, this book comes with a free online service including documents and tools, such as a dividend voucher, licence agreement and profit extraction calculator so that you're able to put the advice into practice. It's the perfect combination.
For who
We've created this Tips & Advice book especially for...
Directors and business owners that want to:
- Get the profit out of their company in a tax-effective and legally safe way
Advisors and accountants that want to:
- Help their clients develop a tax-effective profit extraction strategy
Extras
You'll get the following free extras with this Tips & Advice book...
An online service with ready-to-use documents
- To immediately apply our advice and solutions in practice
- That you can easily adapt to suit your own requirements
| Type of product | Book |
|---|---|
| Version of support of product | Paperback |
| Identifier (EAN / ISSN / Action Code) | 9781911707639 |
| Name of collection | Reeks Tips & Advies |
| Weight | 547 g |
| Availability | In stock |
| Access to exercice | No |
| Publisher | Lefebvre UK |
| Language of the product | EN |
| Publication Date | Oct 27, 2023 |
| Access to Strada Be | No |
| Access to Strada EU | No |
| Access to Strada LU | No |
In this Tips & Advice book you'll read about...
Table of contents
Part 1 - Salary
1. Method
1.1. What do we mean by salary?
1.2. How should you withdraw salary?
1.3. What is the maximum salary you can have?
2. Your company
2.1. Is salary tax deductible for the company?
2.2. What is the NI cost?
2.3. Does the company have to deduct tax from your salary?
2.4. Does it matter how much salary is paid?
2.5. How does IR35 affect the tax position?
3. You
3.1. Should your salary be shown on your tax return?
3.2. What is the NI cost?
3.3. Can you deduct any expenses from your salary?
3.4. At what rate will salary be taxed?
3.5. How does your tax code affect the tax payable?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of salary
6.2. Disadvantages of salary
Part 2 - Bonus
1. Method
1.1. What do we mean by a bonus?
1.2. How do you award yourself a bonus?
1.3. Does it matter how big the bonus is?
2. Your company
2.1. Is a bonus tax deductible for the company?
2.2. Are bonuses and other earnings always tax deductible from profits?
2.3. What is the NI cost?
2.4. Does the company have to deduct any tax and NI?
3. You
3.1. Should your bonus be shown on your tax return?
3.2. What is the NI cost?
3.3. Can you deduct any expenses from a bonus?
3.4. At what rate will your bonus finally be taxed?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of a bonus
6.2. Disadvantages of a bonus
Part 3 - Dividends
1. Method
1.1. What do we mean by dividends?
1.2. How should you withdraw a dividend?
1.3. Is there a limit to the size of dividends?
2. Your company
2.1. Is a dividend tax deductible for the company?
2.2. What is the NI cost?
2.3. Should the company deduct tax when paying a dividend?
2.4. Any restrictions on paying a dividend?
3. You
3.1. Should a dividend be shown on your tax return?
3.2. Can you deduct any expenses from the dividend?
3.3. What is the NI cost?
3.4. At what rate will a dividend be taxed?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of dividends
6.2. Disadvantages of dividends
Part 4 - Interest
1. Method
1.1. What is interest?
1.2. How do you charge interest?
1.3. What rate can you use?
2. Your company
2.1. Is interest paid tax deductible for the company?
2.2. Does the company deduct tax from your interest?
2.3. What is the NI cost?
3. You
3.1. Should interest be shown on your tax return?
3.2. What is the NI cost?
3.3. Can you deduct any expenses from this interest?
3.4. At what rate will interest finally be taxed?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of interest
6.2. Disadvantages of interest
Part 5 - Rent
1. Method
1.1. What do we mean by rent?
1.2. How should you withdraw rent?
1.3. Is it important how much rent you charge?
2. Your company
2.1. Is rent paid tax deductible for the company?
2.2. What is the NI cost?
2.3. Should the company deduct any taxes from the rent?
2.4. Does it matter how much rent is paid?
3. You
3.1. Should the rent be shown on your tax return?
3.2. What is the NI cost?
3.3. Can you deduct any expenses from the rent?
3.4. At what rate will the rent be taxed?
3.5. Should any tax be paid in advance on the rent?
4. VAT
4.1. When do you charge VAT on rents?
4.2. Can the company recover the VAT?
4.3. What’s the best thing to do?
5. Example
6. Pros & cons
6.1. Advantages of rent
6.2. Disadvantages of rent
Part 6 - Loans
1. Method
1.1. What is a loan?
1.2. How do you take out a loan?
1.3. What is the maximum loan you can have?
2. Your company
2.1. Is a loan tax deductible for the company?
2.2. Does the company deduct any tax from the loan?
2.3. Does it matter how big the loan is?
2.4. What is the NI cost for your company?
3. You
3.1. What do you put on your tax return?
3.2. What is the NI cost?
3.3. Can you deduct any expenses from the benefit of a loan?
3.4. At what rate will a loan be taxed?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of a loan
6.2. Disadvantages of a loan
Part 7 - Company cars
1. Method
1.1. What is meant by a company car?
1.2. How should the company car be provided?
1.3. Does it matter what type of car you have?
2. Your company
2.1. Is the cost of the car tax deductible?
2.2. What is the position with leased cars?
2.3. What is the NI cost?
2.4. Should the company deduct tax?
2.5. What about running costs?
2.6. Does it matter how much the company pays for the car?
3. You
3.1. Should a company car be shown on your tax return?
3.2. Can you deduct any expenses?
3.3. What is the NI cost?
3.4. At what rate will you be taxed?
3.5. Is any tax payable in advance?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of a company car
6.2. Disadvantages of a company car
Part 8 - Mileage claims
1. Method
1.1. What is a mileage allowance?
1.2. How do you withdraw a mileage allowance?
1.3. How much mileage allowance can you withdraw?
2. Your company
2.1. Is a mileage allowance tax deductible?
2.2. Which mileage rates should be used?
2.3. What about NI?
2.4. What if the company pays more than HMRC’s approved rate?
3. You
3.1. Should this be shown on your tax return?
3.2. Can you deduct any expenses for unpaid mileage?
3.3. At what rate is excess mileage taxed?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of a mileage allowance
6.2. Disadvantages of a mileage allowance
Part 9 - Personal pensions
1. Method
1.1. What is a company personal pension contribution?
1.2. How should the contribution be paid?
1.3. What is the maximum contribution that can be paid?
2. Your company
2.1. Tax deductible for the company?
2.2. What is the NI cost?
2.3. How much can be paid?
3. You
3.1. Should the pension contribution be shown on your tax return?
3.2. What is the tax and NI cost?
3.3. At what rate will a pension contribution be taxed?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of a pension contribution
6.2. Disadvantages of a pension contribution
Part 10 - Using company assets
1. Method
1.1. What is meant by using company assets?
1.2. What needs to happen?
1.3. Does it matter how much the asset is worth?
2. Your company
2.1. Is the cost of allowing use of equipment tax deductible for the company?
2.2. What is the NI cost?
2.3. How do you calculate the benefit in kind?
3. You
3.1. Should this be shown on your tax return?
3.2. Can you deduct any expenses?
3.3. What is the NI cost to you?
3.4. At what rate will you be taxed?
3.5. Should any tax be paid in advance?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of using company assets
6.2. Disadvantages of using company assets
Part 11 - Free accommodation
1. Method
1.1. What is meant by free accommodation?
1.2. How should the accommodation be provided?
1.3. Does it matter how much the property is worth?
2. Your company
2.1. Is providing accommodation tax deductible for the company?
2.2. How do you calculate the cash equivalent of free accommodation?
2.3. What is the NI cost?
3. You
3.1. Should this be shown on your tax return?
3.2. Can you deduct any expenses?
3.3. What is the NI cost?
3.4. At what rate will this be taxed?
3.5. Is any tax payable immediately?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of free accommodation
6.2. Disadvantages of free accommodation
Part 12 - Childcare
1. Method
1.1. What is meant by the provision of childcare?
1.2. How should the childcare be provided?
1.3. Is there a limit to what the company can pay for?
1.4. Conditions for tax exemption
2. Your company
2.1. Is it tax deductible for the company?
2.2. What is the NI cost?
2.3. What does the company have to tell HMRC?
2.4. Does it matter how much the company spends?
3. You
3.1. Should childcare be shown on your tax return?
3.2. Can you deduct any expenses from this?
3.3. What is the NI cost?
3.4. At what rate will the provision of childcare be taxed?
3.5. Is any tax payable upfront?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of company-provided childcare
6.2. Disadvantages of company-provided childcare
Part 13 - Medical expenses
1. Method
1.1. What is meant by medical expenses?
1.2. How should you withdraw the cost of medical expenses?
1.3. What is the tax treatment of eye tests paid for by your company?
1.4. Is there a maximum that can be spent this way?
2. Your company
2.1. Are medical expenses tax deductible?
2.2. What is the NI cost?
2.3. Is it important how much the company spends?
3. You
3.1. Should the medical expenses be shown on your tax return?
3.2. Can you deduct any expenses from this benefit in kind?
3.3. What is the NI cost?
3.4. At what rate will medical expenses be taxed?
3.5. When will you be taxed on medical expenses?
4. VAT
5. Example
6. Pros & cons
6.1. Advantages of th