For personal and family companies, it is generally tax efficient to extract profits in the form of a small salary, with any further profits being taken as dividends.
Assuming that the personal allowance has not been used elsewhere, if the company is one which is not entitled to the National Insurance employment allowance (as is the case where the sole employee is also a director), or if the employment allowance has been used up, the optimal salary for 2019/20 is generally one equal to the primary and secondary threshold of £719 per month (£8,632 per year). If the employment allowance is available, it is beneficial to pay a higher salary equal to the personal allowance of £12,500.
The dividend allowance is set at £2,000 for 2019/20. This is available to all taxpayers, so consider paying a dividend of at least £2,000 to all shareholders to utilise the allowance. If shareholders have not yet used their dividend allowance for 2018/19, consider paying a dividend before 6 April 2019 to use up the allowance, and also any unused personal allowance. However, remember it is only possible to pay dividends to the extent that the company has sufficient retained profits from which to pay them.
The optimal profit extraction strategy will depend on individual circumstances. Speak to BFMS as to what is the best way for you to extract profits from your company.