Can I take a salary cut to keep things going — or is that pointless?

Taking a salary cut can be a valuable tool if it meaningfully improves cashflow and the business has genuine prospects of recovery, but it's pointless or even counterproductive if it merely delays inevitable failure while leaving you unable to meet personal obligations. The decision depends on several factors. First, is your salary a significant proportion of company costs such that cutting it materially improves viability? If you're paying yourself £50k annually from a business with £500k costs, a salary cut might save 10% of overhead; if you're taking £30k from a £2m turnover business, your salary is almost irrelevant to overall viability and cutting it won't change the outcome. Second, is the business problem fundamentally about cashflow and cost structure, where savings including your salary can restore profitability, or are there deeper issues like declining sales, market changes, or structural debt that your salary cut cannot address? Third, can you personally afford to take a cut without defaulting on your own mortgage, bills, or family obligations? If cutting your salary pushes you into personal financial crisis, you're just converting business problems into personal ones without solving anything. Fourth, is this part of a comprehensive cost-reduction plan that addresses all areas of expenditure, or are you only cutting your salary while leaving other costs untouched, which suggests symbolic gesture rather than real restructuring? Fifth, are other directors, senior staff, or shareholders making equivalent sacrifices, or are you the only one taking a cut? If others aren't sharing the burden, the business culture may be part of the problem. The benefits of salary reduction can include: demonstrating commitment to employees and stakeholders; improving cashflow in genuinely tight periods; reducing overall cost base to restore profitability; showing lenders and creditors you're taking the situation seriously; and potentially buying time to implement other recovery measures. However, the risks and limitations include: you cannot cut salary to zero indefinitely—you have personal financial obligations and reducing income below subsistence levels simply creates different problems; if you have personal guarantees or the business fails, having taken minimal salary makes your personal financial position worse when creditors pursue you; employees may become demoralized if they see directors aren't being paid, as it signals the business is in severe distress; HMRC still expects you to pay at least minimum wage if you're working, so you cannot legally pay yourself nothing while providing full-time work; and if the business is already insolvent, cutting your salary while continuing to trade may be seen as wrongful trading—you're reducing extractions while piling up creditor losses. The most effective approach to salary reduction is making it part of a broader recovery plan: cut your salary alongside other comprehensive cost reductions; set a specific timeframe and review point—'I'll take 50% reduction for six months while we restructure, then reassess'; communicate the decision to key stakeholders to build credibility; ensure you can personally survive the reduced income without creating new problems; and be honest about what the salary cut will actually achieve—if it saves the business, great; if it only delays closure by a few months without changing the outcome, acknowledge this. Some directors cut salaries dramatically or to zero while the business is failing, then face personal financial catastrophe including losing their homes, which doesn't help anyone. You're entitled to reasonable remuneration for the work you do, and being paid appropriately while attempting to rescue the business is not misconduct as long as the business remains viable and you're acting in creditors' interests. If the only way the business survives is if you work for free indefinitely, the business isn't viable and you're just subsidizing creditors with your unpaid labor. Finally, consider whether the salary cut is actually about the money or about self-punishment and guilt—some directors cut salaries to assuage guilt about business failure, but this doesn't help fix underlying problems and can impair your ability to think clearly and make good decisions if you're struggling personally. The decision should be rational and strategic, not emotional penance.