It used to be the case that drawing money out of an private limited company upon cessation was a private matter. You would be charged a tax rate of 10% on the money that you drew out of the company, and that would be that. However, the rules have now changed somewhat. You can draw out up to £25,000 at the tax rate of 10% with an informal liquidation, but anything above that is considered to be personal income and will be taxed accordingly.
This is not good news for business owners who want to draw their hard earned cash out of their company upon cessation. However, there is a solution, and Harnett accountants can advise you how to achieve a much lower tax rate when withdrawing capital from your business upon cessation. Please contact us to arrange a free one hour no obligation consultation, and we will discuss all of your accounting and financial planning needs.
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