Posted on March 14, 2012
By admin | Published: March 14, 2012

Most contractors will take a small salary through their limited companies and take the rest of their remuneration in dividends, why is this the case?

By taking a small salary (the tax efficient salary is around your personal allowance mark) instead of taking all your income as dividend you can claim tax relief on the salary payment (an allowable deduction against corporation tax) also the salary you pay will (providing it is at the right level) preserve you entitlement to your state pension