Tax on profits from company

Neenan

Hi

My other half runs a furniture buusiness which just kicked of this year and i handle the finances for her.

My question is, once you have worked out the net profit for the year is 10k after taking out wages of say 35K. Am i right in thinking she'll get taxed 20% on the 35K amount and If the company is left with say 10k profit she'll pay 20% tax on that amount. Does that sound right?

If someone could let me know it would be appreciated.

fengirl_2

Is she trading through a limited company or is she a sole trader?

ceeforcat

Question appears very simplistic - if wages of £35000 are drawn, the true cost is £38784 including employers NIC, reducing the profit to £6316. The company will pay CT at 20% on this. However:

how much of the £35000 is wages (salary) and how much is monies owed by the company to the director? Was the personal car, for example, brought into the company and at what value? If so, BIK arises with Class 1A Nic being charged reducing the profit still further. These are just some of many questions which need clarified before answering fully.