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Declare dividend now but pay out later

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    Declare dividend now but pay out later

    My company has substantial retained profit and to avoid the higher dividend tax from next financial year (post Apr 6th), I have declared a sizeable dividend. Problem is that most of my business savings are in notice accounts for which I gave notice late and I only have access to the cash in May. Before issuing the dividend, I checked with my accountant and he confirmed that for self assessment purposes, the income from dividend will be treated as income in the year when the dividend was declared, even if the cash was withdrawn from the company later.

    So far so good, but the question I wanted to get an opinion on is whether it is fine to take such dividend in multiple installments from the company. I have some savings in business accounts which are instant access so can I take some of the declared dividend now and then the bulk of the remainder in May when the notice account cash is available? Is there some necessity of the entire dividend transaction appearing as a single payment?

    I can wait for my accountant to opine on Monday but given that April 6th is approaching fast, would like to benefit from other forum members' views on this matter so that I can mull over the options and have a more informed discussion with my accountant on Monday.

    #2
    http://forums.contractoruk.com/accou...d-another.html

    http://m.accountingweb.co.uk/topic/t...s-right/470525

    And so on... Plenty of resources out there and on here covering this.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      As long as the dividend is declared and the documents confirm this is dated before 06-04-16, then it will be included within the 15-16 tax year.

      You can then make multiple payments to pay out the dividend to the shareholders.

      Just make sure you have all of the paperwork to make sure that all of this is detailed for your records.

      Comment


        #4
        JFDI
        I was an IPSE Consultative Council Member, until the BoD abolished it. I am not an IPSE Member, since they have no longer have any relevance to me, as an IT Contractor. Read my lips...I recommend QDOS for ALL your Insurance requirements (Contact me for a referral code).

        Comment


          #5
          Originally posted by Scruff View Post
          JFDI
          What is JFDI?

          Comment


            #6
            Just F______ Do It

            Comment


              #7
              Get the dividend paperwork right and credit it to the directors loan account. Withdraw as necessary.

              Comment


                #8
                Are you guys going to still take the normal 2.5 k divi's each month, or reduce it and invest the money elsewhere.

                Comment


                  #9
                  What's normal about monthly dividends? I doubt many take declare dividends that regularly.

                  Comment


                    #10
                    Well some it up for the whole year then, the 32k odd before higher rate.

                    Comment

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