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  1. #21

    Should post faster

    Louisa@AardvarkAccounting's Avatar
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    Yes, I have not seen HMRC yet try to argue dividends being a salary payment, even if the dividends are paid regularly.

    So - business as usual.

    Make sure the company has the available profits, pay the dividends to the shareholder/(s) and keep your dividend records.

  2. #22

    Super poster


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    Quote Originally Posted by contractorinatractor View Post
    If you have warchest money sitting in the business in a low interest savings account, and haven't used your entire dividend entitlement, you should be taking the money out up to the higher rate threshold, subject to you being satisfied with the new dividend tax.

    Why would you have money sitting at 1% in a business savings account rather than 5 to 20% in your own profit-making vehicles?
    I'm sure that's what I just said.

  3. #23

    More time posting than coding


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    Quote Originally Posted by SueEllen View Post
    Mine are sporadic.
    Mine are spasmodic.

  4. #24

    My post count is Majestic

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    Quote Originally Posted by radish2008 View Post
    Mine are spasmodic.
    Mine are slapstick
    'CUK forum personality of 2011' - Winner - Yes really!!!!

  5. #25

    crap ex-mod

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    Quote Originally Posted by Hobosapien View Post
    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.

    Is that what everyone is doing then, taking divvies upto the higher threshold at 7.5%. This will be my first new full year contacting again after 5 years perm

    I'm trying to decide on the best combination because I've got BTL Income as well as spreading with the missus.

    Went with a simple 750 per month each + the 5k divvy each. Took the 5k divvy each in March, then again in May in the new tax year.

    Now got a shed load of cash sitting in the company account. Just worked out at 750 per month + BTL + Interest etc I'm well over the 11500 taxable limit, so going to have to kill the 750 per month, which in turn makes more profit and more corp tax. So was assuming I should just take up to the Divvy Limit of 7.5% which is 33500 I believe.

    Either way I'm having to pay tax. Feckers.
    What happens in General, stays in General.
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  6. #26

    Contractor Among Contractors

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    I take what I need to pay the bills and pay any tax due. I CBA to work out I've taken too much or not enough wrt tax brackets and the like.
    I reject your reality and substitute my own - Adam Savage
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  7. #27

    My post count is Majestic

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    Quote Originally Posted by ladymuck View Post
    I take what I need to pay the bills and pay any tax due. I CBA to work out I've taken too much or not enough wrt tax brackets and the like.
    This for me. It's pretty easy to see if you have or not in Freeagent but the threshold isn't a dead stop for me.
    'CUK forum personality of 2011' - Winner - Yes really!!!!

  8. #28

    crap ex-mod

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    Quote Originally Posted by northernladuk View Post
    This for me. It's pretty easy to see if you have or not in Freeagent but the threshold isn't a dead stop for me.
    So you're telling me you don't try and work out the best combination / least tax payable then for paying yourself?
    What happens in General, stays in General.
    You know what they say about assumptions!

  9. #29

    More time posting than coding


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    Quote Originally Posted by MarillionFan View Post
    So you're telling me you don't try and work out the best combination / least tax payable then for paying yourself?
    Aren't you just deferring the tax ? You'll still be taxed on it at some point in the future.

    My end of year is in October so I toyed with the idea of bumping up the credit cards for 2 months and paying them off min November. I'd then shunt the CT into the next year but I'd still have to pay it.

    I'm also toying with the idea of spunking the lot

  10. #30

    Should post faster

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    I'm planning on taking it up to the higher rate threshold. Stick the 7.5% tax in a savings account until it needs to be paid off.

    FreeAgent gives you a tally of how much in dividends you have withdrawn, I have a separate spreadsheet based on the FA data telling me how much I can withdraw per month in the remaining months based on how much i continue to take out before hitting the higher rate

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