Tax changes and 2022 is no exception. So what is the best way to get money out of your limited company … how can you minimise the amount of tax you pay, and maximise the amount of money you take out of your business? What’s the best remuneration plan for your business?
The basic principle of small salary and bigger dividend still holds true in 2022 – so how much should you pay yourself?
For a company with only the director on the payroll the optimum small salary is £11,910, ie only just over the lower primary threshold … which means you pay a little bit of NI, but not much. Topped up with a dividend of up to £38,360…which will get you to the 40% threshold of £50,270.
For a company with more than one person on the payroll then the optimum small salary is £12,570, ie the amount of the tax free personal allowance. Topped up with a dividend of £37,700 to get you to the 40% tax threshold.
Of course this information is generic and doesn’t take into account your individual circumstances. What about pensions, or company cars, or benefits in kind? What if you want to take out more than £50k? Or maybe you have rental income or other taxable income then obviously this needs to be tweaked to keep you in the low tax band – or any of a number of other differences from the plain and simple.
Sometimes you just need to get advice from a knowledgeable and expert tax adviser….like JVCA! Get in touch and book your bespoke and individual remuneration plan meeting!
