How to Pay Yourself From a Limited Company Tax-Efficiently (2026 Guide for Surrey Directors)

How to Pay Yourself From a Limited Company Tax-Efficiently

If you run a limited company how you take money out of the business matters. It affects your personal tax, your company’s corporation tax position and how much you can reinvest back into growth. Most directors in Surrey we speak to don’t want “clever tricks” - they just want a simple, legal, tax-efficient setup that doesn’t create problems later.

In the UK most limited company directors pay themselves using a combination of salary and dividends. A salary is treated as employment income so it’s taxed through PAYE and can involve National Insurance. Dividends are paid from company profits after corporation tax, and they’re taxed differently to salary. That’s why the split is important: it’s often possible to reduce unnecessary tax while still keeping things compliant and straightforward.

However, “tax-efficient” doesn’t always mean the same thing for everyone. If you’re applying for a mortgage, for example, lenders may look closely at salary versus dividends. If you’re planning to take on employees, you’ll need payroll set up properly and if your company profits are increasing quickly, it’s worth planning ahead so you don’t end up with unexpected tax bills or cashflow stress.

A good rule of thumb is to keep your finances tidy and predictable. That means accurate bookkeeping, up-to-date management information, and a plan for when tax payments are due. If you’re a director in Epsom or Surrey and you’re not sure whether your current approach is optimal, it’s worth reviewing it before the year-end, not after.

In summary:

- How you pay yourself from a limited company affects both personal tax and corporation tax

- Most directors use a mix of salary and dividends for a simple, compliant setup

- The “best” split depends on your wider plans, including mortgages, hiring staff and future growth

- Planning ahead helps avoid unexpected tax bills and cashflow pressure

- Keeping bookkeeping and payroll up to date makes tax-efficient decisions much easier

- Reviewing your approach before the year-end gives you more flexibility and control

- Surrey directors can benefit from local advice tailored to their business and personal goals

If you’re running a limited company in Surrey and want to pay yourself in a way that’s compliant and tax-efficient, speak to our team for a quick review and a clear plan.