How much do you earn from your business?

[LeasingEval]

Out of curiosity...how many businesses here earn the owners more than 40k per year? Or even 20k?

I think 40k is the threshold where risk v reward of a full-time business becomes worth it.

(And I promise I don't work for the inland revenue!)

 

[crphillips]

I earn a lot of monies.

 

[JandJC]

I maximise my savings in order to make more money than you. Now go and turn on that kettle so I can earn some more

 

[David A]

Out of curiosity...how many businesses here earn the owners more than 40k per year? Or even 20k?

That's a really difficult question to answer.

One goes into business to make money, but also to extract said funds from the business (particularly if it is a ltd co) in ways other than salary - which is what I guess you mean as earnings - as this avoids NI in particular.

As far as income tax on earnings, I don't pay that much. However, I do get levied with a fair bit of Benefits In Kind taxation - which isn't strictly earnings.

For example, the main company I am MD of agrees (while it can afford it) to pay for a two week annual holiday for me and my family. Last year it came to £4,000 (rounded) and I think I paid around £850 BiK. If I was to pay for this holiday out of my salary, then my earnings would probably have to be around £6,000 more.

 

[90DC]

Last year, after tax. In the region of £26k and I'm not afraid to let you all know how little I earn. (This is what I took from the business, not what the business made, which was actually not too much more)

Would be good to see how much the regulars on here earn.

 

[MikeJ]

For example, the main company I am MD of agrees (while it can afford it) to pay for a two week annual holiday for me and my family. Last year it came to £4,000 (rounded) and I think I paid around £850 BiK. If I was to pay for this holiday out of my salary, then my earnings would probably have to be around £6,000 more.

How does that work then? Surely your BiK taxation makes up the difference between what you gained nett and what you should have earned, with the exception of NI. If you pay yourself through the dividends route, then you can exclude NI that way, so is there a benefit in doing this?

 

[deniser]

I do or should I say could do but don't take anywhere near as much as I could out because it is not tax effective.

 

[tomdickandharry]

I pay myself the minimum i have to and take the rest in Dividends.

I do try to run EVERYTHING I CAN through my business. Thats the benefit of having your own company.

Regards
Tom

 

[neilwallace]

The business makes shed loads, but personally I pay myself a very low salary and then me & wifey take dividends up to the 40% tax threshold. Some of the rest goes into a nice tax-efficient pension pot.

I don't pay myself what I don't need. I would rather burn the profit on a bonfire than pay personal income tax & NI to be mis-spent on workshy chavs and foreign wars etc. If I ever need the cash, then it's sat in the business as retained profits that I can dip into should the need arise. Obviously I would have to swallow the tax hit at that stage, but I sleep well in the knowledge that for now at least, it's not being mis-spent by the tax man!!

Anyone else in the same boat?

 

[CKG]

I draw down about £20K a year for living expenses.

I'd like to take more but cash flow generally doesn't allow it as I don't have any debt facilities.

Not a glamorous way to run a business but it's nice knowing I could stop trading tomorrow and it wouldn't cost me a penny of my bank balance.

In the past I've drawn more but been up to my neck in credit facilities (overdrafts and suppliers credit accounts) to do so.

 

[S-Marketing]

I think that generally those of us who make a decent amount have learned the hard way that its best not to mention it on a forum frequented predominantly by under achievers who take offence at anyone earning a tidy sum.

 

[jwmann2]

Vague question. A lot of webmasters ask this question but its comparing apples and oranges. You figure many webmasters are making at least 100 euros per day. Thats 37,000 + euros per year. Takes time before you're able to generate this kind of income online.