PUBLICATION DATE: DECEMBER 2023
PAGES: 295
EDITION: 24th
ISBN: 9781911020875
READ CONTENTS & FIRST SECTION

Salary versus Dividends

& Other Tax Efficient Profit Extraction Strategies

by Carl Bayley & Nick Braun

Salary versus Dividends is essential reading for ALL company owners and directors.

The latest (24th) edition is completely up to date.

Written in plain English with dozens of examples, this unique guide shows you how to save thousands of pounds in tax every year by choosing the best mix of salary and dividends.

The guide also shows you how to reduce your tax bill further by paying yourself rent and interest and using directors' loans, company pension contributions and other powerful profit extraction strategies.

Company owners can enjoy additional tax savings by 'smoothing' their income or varying it from year to year ('roller-coaster income'). This guide shows you how to use these strategies to reduce your tax bill. In one example the company owner saves £16,996 by varying their dividend income from year to year.

What Information is Contained in the Guide?

Subjects covered include:

• All tax changes announced in the November 2023 Autumn Statement and previous Budgets. Income tax is up, corporation tax is up, national insurance is down: we show how every company owner in the land is affected.
• A plain English guide to how companies are taxed... and the new corporation tax rules applying from April 2023.
• How to reduce ALL the taxes you face as a company owner: income tax, national insurance, corporation tax and CGT.
• How to choose the best mix of salary and dividends for YOU.
• How couples in business can extract £27,140 tax free this year, or £100,540 with a total tax bill of just £6,422.
• How to make the most of the 8.75% dividend tax rate and avoid paying 33.75% tax.
• Why older directors can enjoy a salary of around £45,300 with no national insurance payable.
• Why paying your salary monthly or as a lump sum can affect the amount of corporation tax relief enjoyed.
• An extensive new chapter showing when it may now be better to take most of your income as a salary.
• How to reduce your payments on account by postponing dividends even just days, allowing you to keep an average of 15 months worth of tax in your bank account instead of the taxman's.
• How to pay tax-free salaries to family members (including minor children).
• How to save up to £4,201 by avoiding the 56.25% tax rate that kicks in when your income exceeds £100,000.
• Three chapters of vital tax planning ideas for high income earners and additional-rate taxpayers (income over £125,140).
• Fully updated information on the best alternative profit extraction techniques, including:
• Loans to directors - In one example a director saves over £35,000 by taking a loan from their company instead of dividends
• Rental income - More tax efficient than salaries or dividends in many cases
• Interest income - How company owners can pay themselves up to £6,000 tax-free every year
• Pension contributions - You could end up paying just 15% tax compared with a 51% overall tax rate on dividend income.
• Charitable donations - How to benefit your favourite charity by more than £3 for every £1 you give
• Capital Gains - How to pay 10% tax when you sell or wind up your company or 0% with an employee ownership trust
• How to declare dividends properly and avoid higher-risk tax planning (dividend waivers, alphabet shares etc).
• How company owners, by altering their dividends, can save up to £3,770 in capital gains tax when they sell assets like property.
• How to eliminate your income tax bill by investing in venture capital trusts (VCTs).
• How to completely avoid tax by emigrating.

Click here to read the full contents listing and first chapter of the book

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