The Financial Mistakes Costing UK SMEs Money Right Now...
Most business owners are brilliant at what they do. The product, the service, the craft - that part they have mastered.…
Taking Money Out of Your Company
Taking money out of your company is not as simple as it looks
For a lot of company directors, the business account and the personal account blur together
A transfer here, a bill paid there
It feels like your money, because you built the business
But legally, a limited company is a separate entity, and money moving between you and it has to be recorded properly
Here is where it often goes quietly wrong:
Money taken out without being recorded as salary, dividends or a loan. It ends up in a director’s loan account, which then needs to be dealt with
An overdrawn loan account left unpaid. If it is still outstanding nine months and one day after the year end, it can trigger an extra tax charge for the company
Dividends taken without enough profit to support them. Dividends can only be paid from profits, so it is worth knowing where you stand before you pay one
No one checking until the accounts are prepared. By then, the options for putting it right are fewer
None of this means you have done anything wrong. It means the line between “my money” and “the company’s money” is worth a look before the year end, not after
The right way to take money out depends on your circumstances, which is why it is worth a conversation rather than a rule of thumb
If you would like to talk it through, you can book a free call with us, with no obligation
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