Originally posted by le3ky
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Sporadic dividends
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My approach was always that after invoice is paid so have cash in company account and know that most of it will be profit at the end of the year, draw divi on account for any amount required as and when, then at year end one divi is officially declared on accounts with paperwork to back up.
So the only place the divis taken in advance appear is on the company bank statement, which would only be seen by anyone other than accountant during any investigation. I only took them when I needed the extra cash above the normal salary, so not as regular as every month like a salary.
Never had any problem with this approach as it is legit, as advised by my accountant.Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.Comment
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I take regular dividends as I need to eat, pay bills and clothe my kids...______________________
Don't get mad...get even...Comment
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Rather worryingly I asked my accountant when they issue my dividends and they went a little silent.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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I have never come across any evidence whatsoever that HMRC have successfully challenged regular or monthly dividends as "salary", so I think it's nonsense that is parroted by some accountants.
The main argument for not paying dividends at such a high frequency is, as Maslin said, it means more paperwork.
I pay our dividends quarterly (a nice round amount) and then pay a final dividend before the end of the tax year to take me up to the higher rate threshold. I budget our household finances using YNAB and tend to budget 3 months in advance at a time.
If you've got a significant warchest, I think there's also a good argument to be made for taking a single dividend at the beginning of the year and sticking all of it in a savings account (or offset mortgage account if you have one) too.Comment
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Originally posted by TheCyclingProgrammer View PostI have never come across any evidence whatsoever that HMRC have successfully challenged regular or monthly dividends as "salary", so I think it's nonsense that is parroted by some accountants.
The main argument for not paying dividends at such a high frequency is, as Maslin said, it means more paperwork.
I pay our dividends quarterly (a nice round amount) and then pay a final dividend before the end of the tax year to take me up to the higher rate threshold. I budget our household finances using YNAB and tend to budget 3 months in advance at a time.
If you've got a significant warchest, I think there's also a good argument to be made for taking a single dividend at the beginning of the year and sticking all of it in a savings account (or offset mortgage account if you have one) too.
Why would you have money sitting at 1% in a business savings account rather than 5 to 20% in your own profit-making vehicles? If you are able to pay one single dividend every late April then this makes financial sense. If you reasons for not are that you can't handle having such a large amount of money to manage over a year and invest then you really need to take a good look at your habits and resolve them.Comment
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Originally posted by TheCyclingProgrammer View PostI have never come across any evidence whatsoever that HMRC have successfully challenged regular or monthly dividends as "salary", so I think it's nonsense that is parroted by some accountants.Comment
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