Company Directors – Tax-Efficient Ways To Get Paid Part 1

  1. SALARIESThe level of remuneration you take from your company will generally be determined by a number of factors, including:
    • Dividend strategies as a means of saving costly NI
    • The need to make suitable pension provision. The registered pension tax regime offers flexibility in making tax-relieved pension savings.  Personal contributions are limited depending on the amount of remuneration being taken and are subject to an annual limit (£40,000) unless they are paid by the company as an employer’s contribution
    • The possible commercial need to retain a specific level of profits
    • Meeting the national minimum wage (NMW) and, from 6 April 2016, the national living wage (NMW) (where there you have an employment contract).  The NMW for workers aged 21 and over is currently £6.70 per hour, and from 6 April 2016, the NMW for workers aged 25 and over is £7.20 an hour from 6 April 2016
    • The requirements of a shareholders’ agreement, for example, with a venture capitalist investor
    • Your personal spending requirements