Alan Pink looks at some potential ways of taking money from a company without incurring income tax or capital gains tax.
It has often been commented that the tax benefits of running a business through a company can be more apparent than real.
The main benefit, of course, is the fact that companies pay tax at a lower rate (generally speaking) than an individual would pay on the same profits if that individual was trading as a sole trader or as part of a partnership. But this benefit is more apparent than real when the individuals behind the company (the shareholders and directors) then decide to extract money from the company. This extraction is most likely to be by way of dividends, which, although generally more advantageous than remuneration (because of the lack of National Insurance contributions (NICs)), comes with a penalty in the form of what has been