Tuesday, 19 October 2010

How much money can I take from my company?

That depends! How much have you got to spare?

Firstly, you have to be sure that your company has put aside a tax reserve. As a rule of thumb, that should be 21% of your profit (or 21% of your sales if that is easier to calculate). Then most small UK companies will reward the director/shareholder with a mix of salary and dividend.

Click on the chart to see a bigger and clearer version.



For now, we'll just call some amounts "drawings" rather than "dividend" as the precise picture cannot normally be worked out until the profit for the whole trading year has become clear.

Always take round sums for drawings (multiples of £100) and always make a precise payment of salary (£476.25) as these amounts need to be clearly identifiable on the company bank statements.

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