Peter Rayney examines an owner-manager’s cash extraction following the numerous tax and National Insurance contributions changes.
On a wintry sunny morning, Alan was reviewing his company’s January 2024 management accounts. Alan was the sole director and 100% shareholder of Llandudno Hotels Ltd, which operated two large hotels in Llandudno. The business was on course to healthy pre-tax profit of around £650,000 for the year ended 31 March 2024. Alan had been planning to pay himself a substantial ‘bonus’ before the year-end.
However, following the recent tax and National Insurance contributions (NICs) changes, he was now a little perplexed and did not know whether it was best to pay himself a dividend or a bonus. As always in times like these, he decided to ring his trusted accountant, Suzanne.
“Hi Suz (Alan always called her that!), as I told you last week, we are
