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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

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