This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Blood from a stone?

By Chris Thorpe, June 2021

Chris Thorpe looks at some less commonly used methods of extracting profits from a limited company. 

One of the old chestnuts which accountants are often asked is whether a sole trader/partnership should incorporate into a limited company. There’s no one deciding factor; profit levels, nature of the business, risks inherent are amongst the factors to consider, but another is profit extraction.  

Clearly, the owner of a limited company will want to extract enough profit to live; so what’s the best way of going about it? 

The ‘usual’ ways 

Generally, receiving profits largely through dividends is the most tax-efficient method. With the dividend allowance of £2,000 and income tax rates of 7.5%, 32.5% and 38.1% (for basic, higher and additional rate&nbsp

This is one of our 2037 Premium articles

To see this article in full and unlock access to our complete library of 2037 articles click 'subscribe & unlock' below:

Subscriptions include a 14 day free trial
+ money back satisfaction guarantee

Begin your tax saving journey today

Each month our tax experts reveal FREE tax strategies to help minimise your taxes.

To get Tax Insider tips and updates delivered to your inbox every month simply enter your name and email address below:

Thank you for signing up to hear from us!