Advise needed

[lje]

Thank you all for your replies. Did't know that its £6745 + £37K. Need to confirm this with Accountant.

You should get as close to the 40% tax band as you can without going into it (it's around £43,000 income). Then with any remaining money choose one or many of the following:

• pay money into a pension (this is a business expense and reduces the corporation tax you'd have to pay)
• keep it in the company - especially if you think you might not earn as much next year
• keep it in the company with the intention of shutting it down at some point and only having to pay 10% on it (if you don't set up a new similar company)
• pay the rest out as dividends and take the hit on the extra tax you'd have to pay

Remember that if you and your wife worked through the same company then you'll have to consider what to do with any shares that she currently owns. If she has equal shares then all dividends will need to be paid to you both in equal measure - which could increase your tax payments. You might want to consider changing your share structure so that you make the most of her remaining allowance before higher rate tax (around £10k) and your higher allowance level (if you pay yourself £6k then around £37k). so you might want to have 37 shares to your wife's 10 shares.