Today I am coming up with a really quick Tax Twerk tip, and this one is about how to pay yourself properly when you are making [money] in your business.
Recently, someone asked me, a really funny question. They said, “Oh! I am making some money, can I take it from my business when I want some?”
And I was like,”Oh okay! We need to break this down”…
So yes the money is yours, and you are making the money, but the business is legally separate to you.
So, anytime you take money from it, you need to make sure that you are doing it in a correct manner. This can dramatically affect your income tax and your business.
Quick side note: We set up the payroll for you and most likely you are paying yourself some dividends as well, depending on your situation.
So, when you are ready to go with your limited company, you need to make sure when you are taking money you have a dividend structure set up or you are on a payroll.
In a previous video I mentioned that there is a minimum term salary if you are employing other people.
That is a legal requirement and if you are employing other people you must register for PAYE and have a payroll system.
Want help today? In the event of tax, always call Tax Twerk.