I wonder if this is the whole story. A small business might decide to minimise taxable profits by paying herself more or putting more in the pension pot, thereby reducing taxes due from the business and sheltering the profits in their personal accounts
Well, they would have to pay income tax on the wage they pay themselves. And most of the time, the personal income tax rate is higher than the business rate so paying yourself more is tax-inefficient.
I will defer to you on the tax point but I suspect pension contributions would be highly tax efficient and a decent accountant would help minimise combined corporate and personal tax.
I wonder if this is the whole story. A small business might decide to minimise taxable profits by paying herself more or putting more in the pension pot, thereby reducing taxes due from the business and sheltering the profits in their personal accounts
Well, they would have to pay income tax on the wage they pay themselves. And most of the time, the personal income tax rate is higher than the business rate so paying yourself more is tax-inefficient.
I will defer to you on the tax point but I suspect pension contributions would be highly tax efficient and a decent accountant would help minimise combined corporate and personal tax.