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Can I Afford to Take More Money Out of My Business?


small business owner

If you're a business owner in Warrington, you've probably asked yourself this question at some point:


"Can I afford to take more money out of my business?"


Whether you're paying yourself a salary, dividends or simply drawing money from your business, it's important to understand the impact on your cash flow, profitability and future plans.


The answer isn't always straightforward, but there are some key questions you should ask before increasing your drawings.


1. Is There Enough Cash in the Business?

Having money in the bank is a good start, but it doesn't always mean it's available to take out.

Before increasing your drawings, consider:

  • Do you have upcoming VAT payments?

  • Is Corporation Tax due soon?

  • Are there supplier invoices still to pay?

  • Do you have enough working capital for the months ahead?


Looking at your cash flow as well as your bank balance can help you make a more informed decision.


2. Is the Business Making a Sustainable Profit?

Taking more money out is generally easier when profits are growing consistently.


Ask yourself:

  • Is this a one-off good month?

  • Are profits increasing over time?

  • Can the business continue to operate comfortably after the money is withdrawn?


Profitability should guide your decisions, not just the cash available today.


3. How Are You Paying Yourself?

For limited company directors, the way you take money from the business matters.

It could include:

  • Salary

  • Dividends

  • Director's loan repayments


The most tax-efficient option will depend on your individual circumstances.


For official guidance on directors and company responsibilities, visit:https://www.gov.uk/running-a-limited-company


4. Have You Planned for Tax?

One of the most common mistakes we see is business owners withdrawing money without considering future tax liabilities.

Planning ahead for:

  • Corporation Tax

  • Personal tax

  • VAT

  • Payments on account (where applicable)

can help avoid unnecessary pressure later in the year.


5. What Are Your Future Plans?

Before taking additional money from the business, think about what's coming next.

For example:

  • Buying equipment

  • Recruiting staff

  • Investing in marketing

  • Expanding premises


Leaving enough money in the business can provide flexibility when opportunities arise.


What Warrington Business Owners Often Ask Us

Many business owners assume that if there's money in the bank, they can simply take it out.

In reality, the decision is usually part of a bigger conversation about:

  • Tax efficiency

  • Cash flow

  • Future investment

  • Long-term business goals

One Warrington client recently shared:

"I am absolutely delighted to have found Purple Accounts. Their attention to detail, their professionalism and knowledge/understanding of my needs was excellent."⭐⭐⭐⭐⭐ Carol Matthews Google Review – Purple Accounts Warrington

Final Thought

Taking money out of your business isn't just about what you can afford today.


It's about balancing your personal income with the long-term health of your business.

Regular reviews of your finances can help you make informed decisions and avoid unexpected surprises.


If you'd like to understand your options, we're always happy to have a chat about how we can help.

For more information about our services, visit our Warrington accountant page, call 01925 979500 or email@enquiries@purpleaccounts.com


 
 
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