Dividends, Salary and Other Tax-efficient Ways to Extract Profit
Tax-efficient ways to extract profit from your business
Discover the ultimate guide to extracting profit from your company in the most tax-efficient and legally sound ways. This guide is your go-to resource for understanding how to maximise your take-home income while staying compliant with current tax laws. This fully updated edition includes the latest tax rates and thresholds, ensuring you're always working with the most accurate and relevant information.
Inside, you'll explore many proven profit extraction methods, ranging from dividends and salaries to employer pension contributions and more. Each method is clearly explained in plain English, making it easy to understand what’s involved, what actions you need to take, and how each option affects both your personal and corporate tax position. You'll also learn about the VAT implications and weigh the pros and cons of each approach to find the best fit for your business.
To help you make informed decisions, this book includes worked examples that show exactly what it costs your company and how much you’ll be left with after tax. These practical illustrations make complex calculations easy to grasp and apply.
As a bonus, the book comes with free access to a suite of online tools designed to help you put the advice into action. These include a dividend voucher template, a licence agreement, and a profit extraction calculator - everything you need to implement your strategy with confidence and precision.
Don’t leave money on the table. Whether you're a company director, accountant, or small business owner, this guide gives you the clarity and tools to extract profit the smart way.
| Type of product | Book |
|---|---|
| Identifier (EAN / ISSN / Action Code) | 9781911744450 |
| Availability | In stock |
| Publisher | Lefebvre UK |
| Publication Date | Oct 3, 2025 |
Table of contents
1.1. What do we mean by salary?
1.2. How should you withdraw salary?
1.3. What is the maximum salary you can have?
2.1. Is salary tax deductible for the company?
2.3. Does the company have to deduct tax from your salary?
2.4. Does it matter how much salary is paid?
2.5. How does IR35 affect the tax position?
3.1. Should your salary be shown on your tax return?
3.3. Can you get a tax deduction from your salary for job expenses?
3.4. At what rate will salary be taxed?
3.5. How does your tax code affect the tax payable?
1.1. What do we mean by a bonus?
1.2. How do you award yourself a bonus?
2.1. Is a bonus tax deductible for the company?
2.2. Are bonuses and other earnings always tax deductible from profits?
2.4. Does the company have to deduct tax and NI?
3.1. Where on your tax return should you declare a bonus?
3.3. Can you claim a tax deduction for job expenses from a bonus?
3.4. At what rate will your bonus finally be taxed?
1.1. What do we mean by dividends?
1.2. How should you withdraw a dividend?
1.3. Is there a limit to the size of dividends?
2.1. Is a dividend tax deductible for the company?
2.3. Should the company deduct tax when paying a dividend?
2.4. Any restrictions on paying a dividend?
3.1. Where on your tax return should you declare dividends?
3.2. Can you deduct any expenses from the dividend?
3.4. At what rate will a dividend be taxed?
6.2. Disadvantages of dividends
1.2. How do you charge interest?
2.1. Is interest paid tax deductible for the company?
2.2. Does the company deduct tax from your interest?
3.1. Where should you report interest on your tax return?
3.3. Can you deduct any expenses from this interest?
3.4. At what rate is interest taxed?
6.2. Disadvantages of interest
1.2. How should rent be paid to you?
1.3. How much rent can you charge?
2.1. Is rent tax deductible for the company?
2.3. Should the company deduct any taxes from the rent?
2.4. Does it matter how much rent is paid?
3.1. Where should you report rent on your tax return?
3.3. Is a tax deduction allowed for expenses?
3.4. At what rate is rent taxed?
3.5. Is tax payable in advance on the rent?
4.1. When do you charge VAT on rents?
4.2. Can the company recover the VAT?
4.3. Is it financially advantages to charge VAT?
1.2. How do you take out a loan?
1.3. What is the maximum loan you can take?
2.1. Is a loan tax deductible for the company?
2.2. Does the company deduct any tax from the loan?
2.3. When is tax payable by your company for lending you money?
2.4. Does it matter how big the loan is?
2.5. What is the NI cost for your company?
3.1. Where should you report a loan on your tax return ?
3.3. Can you deduct any expenses from the benefit of a loan?
3.4. At what rate will a loan be taxed?
1.1. What is meant by a company car?
1.2. How should the company car be provided?
1.3. Does it matter what type of car you have?
2.1. Is the cost of the car tax deductible?
2.2. What is the position with leased cars?
2.4. Should the company deduct tax?
2.5. What about running costs?
2.6. Does it matter how much the company pays for the car?
3.1. Where should you report a company car on your tax return?
3.2. Can you deduct any expenses?
3.4. At what rate will you be taxed?
3.5. Is any tax payable in advance?
6.1. Advantages of a company car
6.2. Disadvantages of a company car
Part 8 - Mileage allowance payments
1.1. What is a mileage allowance?
1.2. How do you withdraw a mileage allowance?
1.3. How much mileage allowance can you withdraw?
2.1. Is a mileage allowance tax deductible?
2.2. Which mileage rates should be used?
2.4. What if the company pays more than HMRC’s approved rate?
3.1. Where should you report mileage allowance payments on your tax return ?
3.2. Can you claim a tax deduction if you use your car for business?
3.3. At what rate is excess mileage taxed?
6.1. Advantages of a mileage allowance
6.2. Disadvantages of a mileage allowance
Part 9 - Pension contributions
1.1. What is a company personal pension contribution?
1.2. How should the contribution be paid?
1.3. What is the maximum contribution that can be paid?
2.1. Tax deductible for the company?
3.1. Where should you report pension contributions on your tax return ?
3.2. What is the tax and NI cost?
3.3. At what rate will a pension contribution be taxed?
6.1. Advantages of a pension contribution
6.2. Disadvantages of a pension contribution
Part 10 - Using company assets
1.1. What is meant by using company assets?
1.3. Does it matter how much the asset is worth?
2.1. Is the cost of allowing use of equipment tax deductible for the company?
2.3. How do you calculate the benefit in kind?
3.1. Where should you report use of company assets on your tax return ?
3.2. Can you deduct any expenses?
3.3. What is the NI cost to you?
3.4. At what rate will you be taxed?
3.5. Should any tax be paid in advance?
6.1. Advantages of using company assets
6.2. Disadvantages of using company assets
1.1. What is meant by free accommodation?
1.2. How should the accommodation be provided?
1.3. Does it matter how much the property is worth?
2.1. Is providing accommodation tax deductible for the company?
2.2. How do you calculate the cash equivalent of free accommodation?
3.1. Where should you report accommodation on your tax return ?
3.2. Can you deduct any expenses?
3.4. At what rate will this be taxed?
3.5. Is any tax payable immediately?
6.1. Advantages of free accommodation
6.2. Disadvantages of free accommodation
1.1. What is meant by the provision of childcare?
1.2. How should the childcare be provided?
1.3. Is there a limit to what the company can pay for?
1.4. Conditions for tax exemption
2.1. Is it tax deductible for the company?
2.3. What does the company have to tell HMRC?
2.4. Does it matter how much the company spends?
3.1. Where should you report childcare benefits on your tax return ?
3.2. Can you deduct any expenses from this?
3.4. At what rate will the provision of childcare be taxed?
3.5. Is any tax payable upfront?
6.1. Advantages of company-provided childcare
6.2. Disadvantages of company-provided childcare
1.1. What is meant by medical expenses?
1.2. How should you withdraw the cost of medical expenses?
1.3. What is the tax treatment of eye tests paid for by your company?
1.4. Is there a maximum that can be spent this way?
2.1. Are medical expenses tax deductible?
2.3. Is it important how much the company spends?
3.1. Where should you report payments and benefits for childcare on your tax return?
3.2. Can you deduct any expenses from this benefit in kind?
3.4. At what rate will medical expenses be taxed?
3.5. When will you be taxed on medical expenses?
6.1. Advantages of the company paying medical expenses
6.2. Disadvantages of the company paying medical expenses
1.1. What is a family dividend?
1.2. How do you set up a family dividend?
2.1. Is the family dividend tax deductible for the company?
2.3. Should the company deduct tax when paying the family dividend?
2.4. Any restrictions on paying a dividend?
3.1. On whose tax return should family dividends be reported?
3.2. Can you deduct any expenses from the family dividend?
3.4. At what rate will the family dividend finally be taxed?
6.1. Advantages of paying a family dividend
6.2. Disadvantages of paying a family dividend
1.1. What is meant by family salary?
1.2. How should a family salary?
1.3. How much can your company pay?
2.1. Is the family salary tax deductible for the company?
2.2. Should the company deduct tax when paying a salary to a family member?
2.4. Does it matter how much family salary is paid?
3.1. On whose tax return should family salary be reported?
3.2. Can any expenses be deducted from the family salary?
3.4. At what rate will family salary finally be taxed?
6.1. Advantages of a family salary
6.2. Disadvantages of a family salary
Part 16 - Selling assets to the company
1.1. What is meant by selling assets to your company?
1.2. How should you withdraw the sale proceeds?
1.3. Does it matter what price you charge?
2.1. Is the payment tax deductible for the company?
2.3. Should the company deduct tax when paying you?
2.4. Does it matter how much the company pays you?
3.1. Where should sales of assets be reported on your tax return?
3.3. Can you deduct any expenses from the sales income?
3.4. At what rate will the sales income be taxed?
6.1. Advantages of selling to the company
6.2. Disadvantages of selling to the company
Part 17 - Using a company pension fund
1.1. What is a company pension fund?
1.2. How should you withdraw company pension contributions?
1.3. Is there a maximum that can be paid?
2.1. Is a pension contribution tax deductible for the company?
2.3. Does it matter how much is paid in one year?
3.1. Should contributions be shown on your tax return?
3.2. Can you deduct any expenses from a pension contribution?
3.4. At what rate will you be taxed?
6.1. Advantages of a company pension scheme (SSAS)
6.2. Disadvantage of a company pension scheme (SSAS)
1.1. What do we mean by a flexible dividend?
1.2. How do you set up a flexible dividend?
1.3. How much dividend can you take this way?
2.1. Is a flexible dividend tax deductible for the company?
2.3. Should the company deduct tax when paying a flexible dividend?
2.4. Any restrictions on paying a flexible dividend?
3.1. Where should you report flexible dividends on your tax return?
3.2. Can you deduct any expenses from a flexible dividend?
3.4. At what rate will a flexible dividend be taxed?
6.1. Advantages of flexible dividends
6.2. Disadvantages of flexible dividends
Part 19 - Royalties and licence fees
1.1. What do we mean by royalties and licence fees?
1.2. How do you set up such an arrangement?
1.3. How much can you withdraw with this method?
2.1. Are these payments tax deductible for the company?
2.3. Should the company deduct income tax from these payments?
2.4. Does it matter how much is paid?
3.1. Where should you report royalties and licence payments on your tax return?
3.2. Can you deduct expenses from this income?
3.4. At what rate will this income finally be taxed?
3.5. Has tax already been paid on this income?
6.1. Advantages of royalties and licence fees
6.2. Disadvantages of royalties and licence fees
2.1. Will the profit extraction method be tax deductible for your company?
2.2. When will your company get a tax deduction?
2.3. Does it matter if the company pays you monthly, quarterly or annually?
2.4. When will any employers’ NI be payable?
2.5. When can the company pay a dividend?
3.1. When do you have to notify HMRC?
3.2. When will any income tax and NI due have to be paid?
5.2. Before your company’s year end
5.3. Before the accounts are finalised
5.4. Before the nine-month deadline