Originally posted by CoderSaturn
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There is no more tax efficient way of taking money out of YourCo than paying the 7.5% dividend tax. Leaving money in YourCo for taking out later simply means you'll almost certainly pay more tax on it. Tax rates for contractors are only heading in one direction at the moment.
So provided the cash is in your company, you should be taking dividends out right up to the top of the basic rate band.
And besides, if you're on £500 a day (so, what, £110,000 per year) then the £450 is less than one day's pay. The 7.5% dividend tax on it is £33.75. An actual drop in the ocean. Your client has probably paid you more than £33.75 whilst you sit on coffee breaks during one day. So either you pay YourCo £450, or you pay HMRC £33.75 and keep the balance.
Or even better, you pay that £450 into a SIPP. Winner winner, chicken dinner.
But, if you want the company's money to become your money, then you must pay the tax.
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