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.

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 for YOU.

The latest edition has just been published (September 2026) and is completely up to date with all the latest changes, including the recent increase in dividend tax rates and proposals to make directors pay all their tax via PAYE.

Recent changes mean it is now even better for many company owners to pay themselves a substantially higher salary - full details of the potential savings are contained in this new edition.

The guide also shows you how to reduce your tax bill further by paying yourself rental income or interest income and using director's loans, company pension contributions and other profit extraction strategies.

What Information is Contained in the Guide?

Subjects covered include:

• A plain English guide to how companies and company owners are taxed.
• How to choose the best mix of salary and dividends for YOU.
• How that mix is affected when you have other income from outside the company (e.g. rental income).
• How your company can enjoy more tax relief (26.5% instead of 19%) by paying bonuses after its tax year has ended.
• When it pays to take most of your income as salary:
• Sole director companies with most of the £10,500 employment allowance available (savings of up to £4,211)
• Directors seeking to grow the company and prepared to restrict their own income in the short term
• Older and younger directors
• High income earners
• How to avoid the new 35.75% higher rate on dividends and the new 58.25% rate (income over £100,000).
• How couples can extract £100,540 this year with a total tax bill of just £7,998.
• How one company owner saves £16,996 in tax with roller-coaster income: varying dividends from year to year.
• Proposals to make directors pay ALL their tax via PAYE... and what can be done now to mitigate the impact.
• How to pay tax-free salaries to family members (including minor children).
• How splitting your income with your spouse/partner could save over £11,000 annually!
• Several chapters of vital tax planning ideas for high income earners and additional-rate taxpayers.
• How company owners can protect their child benefit payments.
• Fully updated information on the best alternative profit extraction techniques, including:
• Loans to directors - In one example a director saves over £36,000 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 53% overall on dividends
• Charitable donations - How to benefit your favourite charity by more than £3 for every £1 you give
• Capital Gains - Everything you need to know about Business Asset Disposal Relief
• How to declare dividends properly.
• Avoiding higher-risk tax planning strategies (dividend waivers, alphabet shares etc).
• How to save up to £2,262 in CGT by altering your dividends when you sell assets like property.

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