Best way to take money out of a limited company ?

deadl0ck

If I take money out of my company as income, I pay PAYE/PRSI.

Is there a better way ? i.e. I'm talking about tax avoidance (not tax evasion)

Thanks !

kluivert

Private Limited Company - Close Company?

Simple answer no!

All the smart lads in the revenue have caught onto the boys in KMPG tax dept etc and have closed alot of the loop hole.

A few extra details may help in suggesting tax efficient means of taking money out of the company.

Are you a director? Are you married? Is your spouse a Director?
If so are they receiving at least €19,000.00 a year from the company? Is there any BIK? Hope to god that you dont have any loans from the company as it is a legal offence under the companies act to borrow more than 10% of the company's net assets for the current accounting year and the previous year as well.

deadl0ck

Limited company - I'm director, Uncle is other director but I own both shares.
I have no personal loans from the company.
Just wondering if I'm missing something - I'm director, but I pay myself as an employee (only employee of company) and pay standard PAYE/PRSI on that income.

kluivert

The only one way i can think off is if you where married and the spouse was not earning - then give them a salary thru the company of €19,000.00 this will mean your household will avail of an extra €19,000.00 @ 20% instead of 42% a saving of approx €4,000.00 a year in tax.

Its one of those areas in which the revenue have closed off, like director loans etc.

Nuttzz

the company can pay for your pension and PHI, you can buy a premises for the company and rent it to the company.

deadl0ck

Thanks Nuttz, am paying pension and VHI (have to pay BIK) and have commercial vehicle, so it's more actual cash I'm asking about.

kluivert

Yeah nuttz has a point there about the rent issue.
Does the company have its own premises?

If you set up an office in your own home for the use by the compnay ie you, then you can charge the company rent each month for the space. Remember a compnay is a seperate legal entity.

The real advantage here is to the company rather than you, think about it. You get the rent by way of a wage anyway, but the company can use the expense (rent) as deductable against CT as wage is a cost to the company by way of employers PRSI.

Hagar

Be real careful about renting a room in your home to the company.
I was warned that it could leave me open to tax on business property if I sold the house.

deadl0ck

Yep - very wary about the rent thing - may cause more trouble than it is worth - I have already talked to my accountant about this. Instead I get 1/3 of bills paid by the company as my office is in the house.

fintan

I have to admit when i first read the title of the this thread my answer was "balaclava and sawn off shotgun" but as it is your company, that wont be necessary.

The company can pay pension contributions for you as an employee. another way is to make sure you are claiming civil service mileage rates on any travel (generous rate, no receipts required just keep records of all your travelling).

you should also head over to www.askaboutmoney.com there are some really good threads / advice in the ask about business section

Kinetic^

You can claim expenses too, lunch, mileage etc. Check revenue.ie for the rates and stuff you can claim back.