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When you operate a company the company trades and owns the income and cash that the business generates. The company pays its workers including the owners, for the work they do in the form of wages & salaries.

When you take money from your company you should be sure to record it as a wage with Pay As You Go Withholding tax.

If you take funds from your company and don’t record it in the wages system, you have created a director’s loan. These can be hugely problematic and if not dealt with correctly, will be taxed at an effective tax rate of up to 74%!