Working as an independent professional through a limited company offers you the opportunity to devise your own remuneration package.
A remuneration package can be considerably more tax-efficient than simply paying yourself partly as salary and partly as dividends.
Tax-efficient products can be used as part of a plan to create tax free income and to fund expenses such as school and university fees and certain other major payments and acquisitions. You should also ensure that your will is up-to-date and you should take steps to minimise the impact of Inheritance Tax when you die. All these things should be taken into account when putting together your remuneration strategy.
Remuneration strategy is best devised with the benefit of professional advice, rather than as a result of a series of ad-hoc decisions. If you already have an arrangement with a independent specialist financial advisor who advises on these issues, you should take further advice in the light of your new situation. If you do not already have an advisor and you are contemplating a medium-to-long-term career as an independent professional, you should now seek advice.
Unfortunately, very many professionals resist taking advice either because they think this to be intrusive or they feel they should be able to organise these things for themselves. This usually results in doing nothing, paying too much tax and dying intestate with a large Inheritance Tax bill to be paid by the family. The value of your house alone may put you in in this situation.
If this raises any doubts in your mind, we strongly recommend that you take professional advice in this regard from an authorised personal financial advisor.