John Smith

Company director's income tax. Is this calculated against drawings taken from company, or against total profits for the ltd company at year end?

Looking for some clarification regarding ltd company profits and director's tax obligations via self assessment. I'm employed full time PAYE and also operate a small ltd company - with myself as director, no employees, no salary. I take drawings from my company as and when required. My self assessment has been filed by my accountant, and tax due appears to be based on the total profit that the ltd company made for the financial year. I had been under the impression that any self assessment tax due would be based solely on what was taken from the company as drawings? As an example, the ltd company made £8000 profit last year. Self assessment tax has been calculated at the correct tax bracket 40%, but of the total £8000 profit - which is £3200. I took drawings from the company of £4000. So I'm essentially to pay back £3200 of the £4000 I've taken out? This can't be correct?