4 ways to extract more money from your company

more money

One of the most common questions that a lot of business owners ask is how they can go about extracting more of the profits from their business without also incurring a hefty tax bill. After all, if your business is turning a profit, then as the business owner, you want to be able to access that profit.

The vast majority of people who trade from a company will be aware of the concept of their director’s loan account. This also comes with a great deal of frustration because many business traders find themselves constantly going overdrawn on their loan account or having funds within their company that they are unable to access without simultaneously triggering a significant tax bill.

This might not be something that you have experienced as of yet but as time goes on the chances that this will be a problem you will come up against are going to increase pretty significantly.

It’s fortunate then that there are several creative solutions available to anyone in this situation. Not only that but there are plenty of basic things that you can do and should be doing to relieve the pressure on your loan accounts.

Reclaim business miles

If you’re in a position where you have travelled for business in any way other than in a company vehicle with a fuel allowance provided, except for home to work, then you should be recording every mile travelled. You can then charge these back to the company at the appropriate mileage rate. Doing this can prevent you from unnecessarily eat away at your loan account.

Utilize the children’s tax-free allowances

Things like school fees and children’s savings are finances that should never come out of your loan account. Fortunately, there are options and solutions to this issue that allow payments to come out of the company while avoiding your loan account entirely.

Staff gifts

Gifts given to your staff should always go through the company as a tax-deductible expense. Otherwise, you should make sure that they are taxed through the payroll of the staff members concerned. Not only that but any non-cash gifts with a value of less than £50 are generally tax-free for the staff member. This is because they fall under the rules of what is known as “trivial benefits.”

Gifts to yourself

Of course, the same basic principle applies to any gifts to yourself and that allows you to take advantage of the ‘trivial benefits’ rules as well. However, you must remember that this is capped at a total of £300 per tax year for each director.

These are just a few suggestions as to ways that you can reduce the impact on your loan account and extract more value from your business. Of course, these are just 4 possible methods. There are plenty of other potential options available to you if you feel as though that’s something you require. There are always creative solutions available to help you extract additional value from your business at the lowest possible tax cost.

Get in touch with us at TreyBridge Accountants today and arrange a meeting to discuss how you can effectively make more money from your company.