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The most tax-efficient thing you can do is live off your main job and don’t spend the company money. The company account can then be your “rainy day” account for “life events”. If you ever lose your main job you can take out company money very efficiently. Let's say you lose your job on the last day of the tax year. You can then draw both full personal tax allowance and dividend tax allowance. That is £14.5k tax-free. You will then pay only 7.5% tax on the next £35.5k. So that is £2.6k of tax on 50k. Then you are laughing and the taxman isn't. You could quit your job and travel around the world doing freelance remote work and be really winning.

The most tax-efficient thing you can do is live off your main job and don’t spend the company money. The company account can then be your “rainy day” account for “life events”. If you ever lose your main job you can take out company money very efficiently. Let's say you lose your job on the last day of the tax year. You can then draw dividend up to the full personal tax allowance plus the dividend tax allowance without any personal tax. That is £14.5k tax-free. You will then pay only 7.5% dividend tax on the next £35.5k up to the higher-rate tax income. So that is only £2.6k of personal tax on 50k of dividend. You will then be laughing while the taxman isn't. You could quit your job and travel around the world doing freelance remote work enjoying those tax benefits and be really winning.

Your company can buy some amazing computer hardware before taxes. Yet it is a waste of money to be doing that every year. It can buy a top range company phone but the SIMM only contract its a taxable benefit. Your personal tax bill will swell to include 40% of the SIMM contract cost. That is a 60% saving over busing a personal contract from salary, but it doesn't really excite me. In the UK small companies don't get the huge discounts that UK consumers get. For example, you will pay charges for your company bank account and in the UK we are used to getting free personal-banking. IHMO you get hit with a lot of unexpected costs so it really isn't as rosy as people think. YMMV.

Once you take the red pill and see a few tax bills you might suddenly take a very keen interest in tax efficiency. My number one tip is to track the money of every paid invoice and assume the worst possible taxes on that invoice. By overestimating the taxes you will always be able to pay the tax bill and your company bank balance will grow. When it is about six months worth of money to live off the start creaming it off into a pension.

The most tax-efficient thing you can do is live off your main job and don’t spend the company money. The company account can then be your “rainy day” account for “life events”. If you ever lose your main job you can take out company money very efficiently. Let's say you lose your job on the last day of the tax year. You can then draw both full personal tax allowance £12.5k and the dividend allowance tax of £2k tax-free. You can then only paying 7.5% on the next £36.5k. Then you are laughing and the taxman isn't. You could quit your job and travel around the world doing freelance work and really be winning.

Your company can buy some amazing computer hardware before taxes. Yet it is a waste of money to be doing that every year. It can buy a top range company phone but the SIMM only contract is a taxable benefit. Your personal tax bill will swell to include 40% of the SIMM contract cost. That is saving over buying a personal contract from your salary, but it doesn't really excite me. In the UK small companies don't get the huge discounts that UK consumers get. For example, you will pay charges for your company bank account and in the UK we are used to getting free personal-banking. IHMO you get hit with a lot of unexpected costs so it really isn't as rosy as people think. YMMV.

Once you take the red pill and see a few tax bills you might suddenly take a very keen interest in tax efficiency. My tip is to track the money of every paid invoice and assume the worst possible taxes on that invoice. By overestimating the taxes you will always be able to pay the tax bill and your company bank balance will grow. When it is about six months worth of money to live off then start creaming it off into a pension.

The most tax-efficient thing you can do is live off your main job and don’t spend the company money. The company account can then be your “rainy day” account for “life events”. If you ever lose your main job you can take out company money very efficiently. Let's say you lose your job on the last day of the tax year. You can then draw both full personal tax allowance and dividend tax allowance. That is £14.5k tax-free. You will then pay only 7.5% tax on the next £35.5k. So that is £2.6k of tax on 50k. Then you are laughing and the taxman isn't. You could quit your job and travel around the world doing freelance remote work and be really winning.

You only pay corporation tax after expenses. For freelance developers, expenses are not as generous as people seem to think. Even if you work from home a full day you cannot expense your lunch. The money your company can pay you to use your home as an office tax-free is a pittance. If you travel to visit a client you get some expenses such as a reasonable lunch and the cost of the travel but it isn't a significant amount. I don't think of business expenses as a perk; they are just the cost of doing business. You can do also do some client entertaining tax-free, yet that's a perk for them not you. You can skip that and put money into a company pension plan and that would be buying you perks for you when you hit 55 when you can take out a tax-free lump.

You only pay corporation tax after expenses. For freelance developers, expenses are not as generous as people seem to think. Even if you work from home a full day you cannot expense your lunch. The money your company can pay you to use your home as an office tax-free is a pittance. If you travel to visit a client you get some expenses such as a reasonable lunch and the cost of the travel but it isn't a significant amount. I don't think of business expenses as a perk; they are just the cost of doing business. You can do also do some client entertaining tax-free, yet that's a perk for them, not you. You can skip that and put money into a company pension plan and that would be buying entertainment for you when you hit 55 when you can take out a tax-free lump. That really is a perk.