UKFT associate member TC Group urges companies to consider a review of director/shareholder pay following the last payday of the tax year and in light of the current situation with the Coronavirus outbreak.

TC Group suggests that this is the best time to review any director/shareholder remuneration, not only for the few months ahead but also for the rest of the year.

The default position for most owner-managers is to pay a small basic salary and then draw the rest of their remuneration as dividends from the company. Although that has significant tax advantages, there may now be other factors to consider, particularly if you are expecting your business to have profitability issues in the foreseeable future.  While increases in salary will not help in relation to the job retention scheme payments, it may be the safest course of action for some owners to protect their position if they believe the company’s medium to long term profitability is likely to be reduced.

Each situation is different, and it is important that all aspects are considered when deciding on the company’s policies going forward.

Find out more about TC Group here.

UKFT is in constant dialogue with the government and is outlining the latest support available for businesses on our website. We will update the details as and when the situation changes. 

UKFT CORONAVIRUS GUIDANCE