Which is most tax-efficient? Salary vs. Dividend

Owner-managers and contractors often pay themselves in a combination of salaries, bonuses and dividends. A common strategy is to draw a salary of around £8,000 while also extracting profits from the business as a dividend. Others opt for a higher salary to make better use of the personal allowance and, in doing so, help lower company profits which are liable for corporation tax.

What’s the most tax-efficient way to pay yourself in 2016/17? Read our guide to find out.

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