Sarah Bradford considers what might constitute an optimal profit extraction strategy for 2023/24.
As the 2023/24 tax year draws to a close, directors of personal and family companies should be reviewing the profits they have taken from their company so far in the tax year and considering whether it would be worthwhile to extract further profits before the end of the tax year on 5 April 2024.
Where a business is operated as a personal or family company, the profits need to be extracted if they are to be used by the director personally. There are various ways of doing this. This article looks at popular extraction strategies and the associated tax implications.
Salary: How much?
Taking a small salary can be very tax-efficient. Not only that, but if the individual does not already have the 35 qualifying years needed to provide full entitlement to the state pension,
