The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
For owner-managers, most on-going remuneration requirements will usually be met in the form of a combination of regular salary, bonuses or dividends. Although tax will be an important factor in determining the necessary combination, it will not be the only one; non-tax matters will often have more importance.
The composition of a proprietor’s remuneration package should be considered carefully to try to achieve the most tax efficient result possible. Tax is, as usual, not the only consideration; the following must be taken into account in tax planning for a proprietor’s remuneration:
All of this remains true notwithstanding the changes to the taxation of dividend income from 6 April 2016. With effect from that date, the way in which dividends received by individuals changed fundamentally. In most cases this will result in higher effective tax rates for owner-managers extracting profits by way of dividends.
For general guidance on extraction of profits, including longer term, non-cash and capital methods of profit extraction, see the Effective extraction strategies guidance
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