News
Rethinking Directors’ Remuneration After the Autumn Budget
18 Dec 2025
By Tom Davies, Senior Client Manager
Following the Chancellor’s Autumn Budget announcement on 26th November, many business owners will be asking the same question: What is the most effective remuneration package for me now?
It’s a fair question. With the recent changes to National Insurance contributions (the tax both you and your company pay on earnings) and other tax measures now confirmed, what worked for them last year might not be quite as effective going forward.
A Recent Example
Take Sarah, a director of a successful manufacturing business in Shrewsbury. Like many owner-directors, she’d been drawing a relatively small salary of around £12,500 a year, then taking the rest of her income as dividends (basically, a share of the company’s profits paid to shareholders).
This classic approach kept her personal tax and National Insurance low whilst minimising the company’s employer National Insurance bill. It had worked well, but does it still?
After the Budget announcement, Sarah came to us wondering if this approach still made sense given the changes. We sat down together and looked at the full picture: her income needs, the company’s profitability, her pension pot (which was lower than she’d like), her wider financial planning and how the new tax landscape affected both her personally and the business.
The outcome? We adjusted her remuneration mix, some of the changes we made included a slightly higher salary and looked at the timing of her dividend payments throughout the year. We also brought pension contributions into the strategy, allowing the company to contribute directly to her pension. This reduces the company’s corporation tax bill whilst building her retirement fund without triggering an income tax liability.
The result was a package that not only remained tax-efficient under the new rules, but also improved her long-term financial position and gave her more certainty about her retirement planning.
What This Means for You
Every director’s situation is different. Your optimal remuneration package depends on your personal circumstances, business structure, financial goals and it is key these are all considered when formulating an efficient strategy.
If you’re wondering whether your current approach still makes sense after the Budget changes, now’s a good time to review it. Our team can help you understand how the announcements affect your specific situation and explore options that work for you and your business.
Get in touch with one of our team to discuss your remuneration package and ensure you’re making the most of the opportunities available.
