Business owners have a unique advantage: they can choose how they get paid. The most tax-efficient structure is often a mix of both Salary and Dividends.
Salary (The Safe Route)
Paying yourself a small salary is usually smart to ensure you contribute to Social Security/National Insurance (for state pension entitlement). You need to generate a Payslip for this every month.
Dividends (The Tax-Efficient Route)
Dividends are paid out of profits after corporation tax. They usually attract a lower personal tax rate than salary. However, you cannot take dividends if the company is not making a profit.