You will have to deduct any income tax, National Insurance and Employer’s National Insurance contributions due and make payments to HMRC. The simplest way to take money out of your business is to pay yourself a regular salary. Related: How To Read Company Accounts Taking a salary It also makes it easier to maintain and verify accurate accounts for reporting and tax returns. That ensures that your business transactions are separate from any personal banking activities. The essential starting point is to open a separate business bank account and to use the bank’s payment cards, cheques, paying-in books or online facilities for all business-related receipts, payments and withdrawals. Taking money out of a business account for personal use Set up a business bank account If you need advice on the most suitable, tax-efficient method of taking money for your individual circumstances, our experienced small business specialists can help. In this brief guide, we’ll explain more about the recognised methods for taking money out of a business account for personal use, and provide guidelines for dealing with business payments for personal expenses. But, it can incur additional work for you or your accountant, and there are risks involved in mixing business and personal transactions. Provided you repay the money to the business, preferably as soon as possible, there is nothing illegal about the withdrawal. However, the situation becomes more complex if you want to take money out of the company to cover personal expenses, for example by using a company cheque or credit card, or withdrawing cash for the payment. There are four recognised methods – taking a salary, taking dividend payments, taking a director’s loan and receiving reimbursement for business expenses that you have paid through your personal account. If you have decided to run your UK business through a limited company rather than operating as a sole trader, you have a number of options for taking money out of your company.
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