When running a business you need to give careful consideration to how you take profits out of it. To a large extent this is dictated by the choices you make initially about your business structure.
Extracting funds from a limited company is arguably more difficult and potentially more costly than extracting funds from a sole tradership or partnership. However, as we have already seen, the overall tax rate and tax liabilities can be significantly lower using a limited company. Whichever way you run your business the method by which you choose to pay yourself will have an impact on your personal tax liabilities and is therefore a fundamental part of your tax planning strategy.