Salary
There is a tiny change in the national insurance limits for 2017 / 2018.
So from April 2017 you can pay a salary of £680 / month without paying any tax or NI.
If you choose this option, you:
You do get National Insurance Credits towards some benefits for example state pension.
You must be registered as an employer.
You have to file an RTI (real time information) return each pay period – remember there are fines if you file the RTI return late.
No income tax or national insurance is due on the monthly salary payment.
This is a perfectly legal and an acceptable way of paying yourself from your company.
Dividends Received
Dividends are payments from company profits to shareholders.
Dividends from companies, unit trusts and open-ended investment companies are all taxed in the same way.
From 2018/19, dividend taxation as we knew it changed. The dividend tax credit was removed and was replaced by the system detailed below.
Income tax band
Rate
Basic rate -7.5%
Higher rate -32.5%
Additional rate -38.1%