Making the Most of Your Limited Company: Perks and Tax Efficiency for Solopreneurs and Small Businesses

Running a limited company, whether as a freelancer, solopreneur, or with a small family team, offers flexibility and tax advantages. Here’s how to make the most of your company perks while staying tax-efficient, compliant, and stress-free.

Balancing Salary and Dividends:

• Salary + Dividends Combo:
  Once you’ve paid yourself a small salary (usually up to the National Insurance threshold), you can draw the rest of your income as dividends. This approach maximises your take-home pay, as dividends are taxed at a lower rate than salary.

  Bonus Tip:
  If your spouse or partner is a shareholder, you can share dividends to use both of your tax allowances - a simple, legitimate tax win.

Building Your Nest Egg:

• Pension Power: Your company can make pension contributions directly on your behalf. This reduces your company’s taxable profits and boosts your retirement fund - one of the most tax-efficient moves available.

  Example:
  A £10,000 employer pension contribution could save your company around £1,900 in Corporation Tax (at 19%), with no personal tax or National Insurance to pay.

Trivial Benefits: Small Treats that Add Up

Directors can give themselves “trivial benefits”, little gifts and perks that don’t get taxed.

The golden rules:

• Each item must cost £50 or less (including VAT).

• It can’t be cash or a cash voucher.

• It can’t be a reward for doing work.

• Close companies (where directors are also shareholders) have a £300 annual limit per director.

Ideas we love:

• A bottle of your favourite wine or 0.0% gin.

• A local restaurant gift card instead of another Jeff’s Van (Amazon) voucher - support a small business!

• Tickets for a concert, local theatre, or family day out.

• A just-because bunch of flowers or a birthday cake.

These small gestures make life a bit sweeter, and they’re 100% legitimate and tax-free when done correctly.

Staff & Christmas Parties (Yes, Even for You!)

HMRC allows you to spend up to £150 per person per year on annual events, including staff parties, and that includes directors and their guests.

For 2026 and beyond:

• The £150 includes VAT, food, drinks, travel, and entertainment.

• It can be used for a single large event (such as a Christmas party) or spread across multiple smaller gatherings.

• It must be open to all employees (even if that’s just you and your partner).

• Go over £150, and the entire amount becomes taxable - not just the excess.

So yes, your company can pick up the tab for your Christmas dinner or summer celebration - keep it reasonable and record it properly.

Perks with a Purpose

Professional Edge:
Your company can pay for relevant subscriptions, memberships, and training to keep your skills sharp and compliant - all tax-free when linked to your work.

Medical & Life Cover:

• Medical insurance can be provided to all employees. Routine health checks &flu jabs are tax-free if offered broadly.

• A Relevant Life Policy offers life assurance paid by the company, tax-free and fully deductible.

Home Working Costs:
If you work from home, you can claim a portion of household expenses like heating, electricity, and broadband.

👉 At Gold Stag, we work this out properly using our Working from Home Calculator, not the flat HMRC rate.
If you haven’t received the form, ask us for our Working from Home calculator - we’ll ensure you’re claiming the correct, compliant amount.

Travel, Meals & Subsistence – The Rules Made Simple

When you’re travelling for business, your company can cover the cost of the journey and your meals, provided the trip is wholly and exclusively for business purposes.

What counts as allowable travel:

• Trips to client meetings or suppliers.

• Travel to your accountant or training courses.

• Journeys to temporary workplaces (not your usual office).

What doesn’t count:

• Your regular commute from home to your normal place of work (even if that’s your home office).

Allowable expenses include:

• Train, bus, or flight tickets.

• Parking, tolls, or mileage.

• Hotel stays for overnight business trips.

• Meals and coffees while you’re away.

Example:
Travel from Bristol to London for a client meeting. Your company can pay for your train, lunch, and even that essential pre-meeting coffee — all tax-deductible, provided it’s genuinely for business and you keep the receipts.

Quick Tip:
Keep a simple mileage and meal log. It’s an easy way to capture legitimate expenses that quickly add up across the year.

Going Green: Electric Cars and EV Perks

Running your car through the business can be a smart move, especially if it’s electric.

• Benefit-in-Kind (BiK) rates remain ultra-low (2%) until 2028.

• The company can claim Corporation Tax relief on the car or lease payments.

• VAT reclaim may be applicable (typically 50% if there’s private use).

• No fuel benefit charge, just reimbursement for business miles.

EVs are one of the last great tax perks for directors.

Smart Extras

Company Mobile Phone:
You’re entitled to one company-provided mobile phone (including the contract) per employee, tax-free, even if there’s personal use.

Business Equipment:
Work laptops, tablets, printers, and software are all deductible. Occasional personal use is fine.

Charitable Giving:
Donations made by your company to registered UK charities are tax-deductible and do good in the world, a win-win.

Cycle to Work Scheme:
Let your company purchase an electric or traditional bike for your commuting needs. You’ll save on tax and keep fit at the same time.

Directors’ Loans: Proceed with Extreme Caution 🚨

This is where we sound the alarm bells.
Yes, you can technically borrow money from your company, but it's best to do so only if absolutely necessary.

Here’s why:

• If you owe the company money at year-end and don’t repay it within 9 months, HMRC hits your company with an extra 33.75% Corporation Tax charge (known as “Section 455”).

• If you write it off or fail to repay it, the amount becomes taxable as personal income, subject to dividend tax, interest, and potential penalties.

• HMRC keep a very close eye on directors’ loan accounts. It’s one of the biggest red flags in a tax inspection.

Our advice:
Avoid it entirely. If you’re tempted to “borrow a bit and repay it later”, talk to us first. There are almost always better, cleaner options (like declaring a dividend or adjusting drawings properly).

Staying Organised

Keep your records tight and tidy:

• Receipts: Keep digital copies and note the purpose of each expense.

• Mileage: Record every trip for business mileage claims.

• Logs: Record all small expenses and payments to ensure compliance.

Good records make your accountant happy and HMRC calm.

The Takeaway

Running your own limited company means you can reward yourself smartly. From EVs and pensions to Christmas parties and little “just because” gifts, there are plenty of legitimate ways to enjoy your success while keeping your tax bill efficient.

Just remember: the perks are there for directors who play by the rules. Use them wisely, keep solid records, and check in with us before doing anything risky (especially if the words “loan from the company” ever cross your mind!).