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  1. #1

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    Default Self Assesment Tax Return question

    Hi,
    I was trying to tailor my SATR for the period 2015/16 but I have a simple question I guess. Basically I'm the director of my company and I've received dividends in that period, but I have not a wage in my company, so I dont have PAYE, I'm receiveing money for my company as expenses that I pay or dividends.

    So let's say that the Sales (turnover) of my Company for that period were 20000, and I transfer 15000 as dividiends to my personal bank account. I was expecting that the SATR calculation shows that my 2015/16 incomes where 15000 and that is the only amount to consider to pay taxes on, but apparently the SATR is showing that I have to pay taxes for 35000, so is adding up My Company turnover (20k) plus the dividiends (15k)...

    Does anybody know what I'm doing wrong? Maybe, because I dont pay myself a salaly, I shouldn't fill the "Self-employment" section at all, not sure.

    Probably I missunderstood something, any help would be appreciated.

    Cheers.

  2. #2

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    Default

    It seems like you're a bit out of your depth and you should really be speaking to your accountant.

    Nevertheless I'll try and help you out...

    Your company's finances have nothing to do with your personal tax situation therefore I don't know why or where you are entering your company turnover into your tax return.

    My understanding is that you still need to complete an employment sheet for each directorship even if you didn't receive a salary, but I could be wrong on that. Either way, assuming all of your expenses were covered by exemptions (so you had a nil P11D) then there shouldn't be anything of interest to declare on there.

    You most definitely should not be filling out a self-employment section.

    Your dividends will be entered elsewhere on the self assessment and this is what you'll be taxed on (less any unused personal allowance).

    Its also somewhat concerning that you seem to have paid yourself dividends without considering your company's tax liabilities. Dividends are paid out of post-tax company profits. Do you have any idea of your gross and net profit and CT liability?

    Based on the figures you've posted, you have 20k turnover. This, less any expenses payments made to yourself or any company expenses (e.g. accountancy fees or other stuff that company has paid for directly) should be your taxable profit. You'll pay 20% corporation tax on this and whatever is left is retained profit that can be distributed as dividends. Depending on how much you've incurred in expenses, you seem to be cutting it very fine in terms of dividends paid vs how much retained profit you would have had left over.

    Coming back to my original statement...get an accountant quickly.

  3. #3

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    You, Sir, are about to be shafted. By yourself, and then by an Accountant.
    We have a poverty of intellect....
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    Default

    Hi,
    thanks for your input, really helpful. I've been running my LTD 3 years now but is the first time I'm doing the SATR myself, so there are some concepts I need to get use to.

    I've been googling a bit after read you post and I see the main differences between self-employed and Limited Company, which is my case, so definitelly as you said, I don't need to fill that section for the Return.

    Regarding the dividends the figures that I put on the post were a dummy example, I did my calculations a year ago to minimize the taxes payed on that, so gross - expenses - corporation taxes, and then taking dividends up to the 30k yearly threshold. And here I have another question, my Accounts period start on 1/11/2015 and ends on the 31/10/2016 but the Self Assesment Period is from 6/4/2015 to 5/4/2016, so doing those calculations about what should be the amount of dividends to move from the LTd to my personal account is a bit complicated sometimes. So is there a easy way to update my Accounts period to be the same as the Self Assesment one?

    Sorry if this question should be in other thread,

    Thank you very much again.

  5. #5

    Contractor Among Contractors

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    If you've been doing it for 3 years why don't you just look at what your accountant did for the last 2 years? You do have a copy as you reviewed it before submission surely?
    See You Next Tuesday

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    Someone really needs an accountant. That's a lot of stuff to sort out and you are going to be lucky if anyone can be bothered to go through it all with you on here. It also begs the questions if you don't know all this what else don't you know.

    Using Free agent would make a lot of that a lot less complicated as well.
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