Salary, dividends, or director's loan — how to take money from your UK company as a Gulf director

Once your UK company starts generating income, the next question is always: how do I actually get money out of it? There are three legitimate routes — salary, dividends, and director's loans. Each works differently, each has different UK tax consequences, and some of those consequences apply even if you live in the UAE, Saudi Arabia, or Kuwait. Understanding the structure before you pay yourself prevents problems that are expensive and slow to unwind.

A salary paid by your UK company is employment income. It's subject to UK PAYE — the company deducts income tax and National Insurance at source. For non-UK residents, UK-sourced employment income is still subject to UK tax, although you're entitled to the personal allowance (£12,570 in 2025/26). In practice, many Gulf directors pay themselves a small director's salary at or just below the allowance threshold — low enough that no income tax is triggered, but sufficient to maintain a National Insurance contribution record if that's relevant to them. Above the allowance, UK income tax applies.

Dividends are paid from after-tax company profits — the company pays corporation tax first, then distributes what remains to shareholders. Dividends are not subject to PAYE or National Insurance. For non-UK residents, the UK tax position on dividends depends on whether a double taxation agreement (DTA) exists between the UK and your country of residence. The UAE, Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman all have DTAs with the UK. The exact withholding tax rates and exemptions vary by treaty — this is an area where you need specific professional advice on your personal circumstances, not a general rule.

Director's loans are the route that causes the most problems. A director's loan occurs when you take money from the company that isn't formally recorded as salary or dividend — a transfer to cover a personal expense, a cash withdrawal, an informal advance. If the company has lent money to you and it isn't repaid within 9 months of the company's accounting year end, HMRC charges the company a 32.5% tax on the outstanding balance. This is called the S455 charge. It's refundable when the loan is repaid — but only in the tax year after repayment. The cash flow impact can be severe for a small company.

For most small Gulf-owned UK companies, the most common and practical structure is a modest director's salary (below the income tax threshold) combined with dividends from remaining profits. What matters most is that every transfer from the company account to your personal account is properly recorded — as salary, dividend, or loan. Informal withdrawals treated as unexplained transfers create accounting errors, CT600 adjustments, and potential HMRC enquiries. The record-keeping is not complicated, but it has to be done.