{"id":2486,"date":"2016-07-06T09:35:09","date_gmt":"2016-07-06T09:35:09","guid":{"rendered":"http:\/\/my-brains.co.uk\/jackross\/?p=2486"},"modified":"2016-07-05T09:37:10","modified_gmt":"2016-07-05T09:37:10","slug":"extracting-profits-business","status":"publish","type":"post","link":"https:\/\/my-brains.co.uk\/jackross\/extracting-profits-business\/","title":{"rendered":"Extracting profits from your business"},"content":{"rendered":"

A guide to tax-efficient profit extraction for business owners.<\/em><\/p>\n

Owning and running your business is a tough proposition but it is vitally important that people continue to do it. As well as the rewards that come from hard work and determination, there are also monetary benefits to running your own business.<\/p>\n

There are a variety of ways in which profits can be taken out of a business, each with their own tax implications. And, of course, tax rules have a habit of changing over time so strategies that worked in the past may not be best suited to the present.<\/p>\n

The basics<\/h1>\n

When we talk about profit, in its simplest sense we are talking about:<\/p>\n

total revenue \u2013 total expenses = profit <\/em><\/strong><\/p>\n

This means that profit is whatever is left over once a company has paid its taxes, rent, bills, salaries and other expenses.<\/p>\n

Although every business\u2019 goal is to make profit, it can take a long time.<\/p>\n

Corporation tax is levied on the profits a company makes from doing business (\u2018trading profits\u2019), investing and selling certain assets for more than they were originally bought for (\u2018chargeable gains\u2019).<\/p>\n

The current rate of corporation tax is 20% but it is due to reduce:<\/p>\n