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Small limited company tax efficiency query

L

lessbutbetter

New Member
Hi and thanks for reading my question.

I run a small limited company and draw the maximum £8k ish salary to keep me under the NI threshold plus £2000 tax free dividends x 3 (spouse and daughter are also directors). All remaining profit is paid into my pension monthly + one-off lump sums.

I've recently dropped a large client and the available profit going forward isn't going to be enough to continue paying the company pension contribution at the same level if I keep taking the maximum tax free salary + dividends.

I don't need all the salary + dividends for day to day expenses and just take the maximum out as it's tax free and thought I should. The main aim of running my business is to fund my future pension, which I was on track to be able to take in 18 month's time.

Ideally I'd like to keep my pension contribution as it is, or even increase it, but I'm not sure if I'm being inefficient by not making the most of the tax free salary + dividends.

What to do...

Thanks in advance.
 
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