Originally posted by TheCyclingProgrammer
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Interim Dividends v Director Withdrawals
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Originally posted by jamesbrown View PostI think the pertinent question is this: given the simplicity of making separate payments and the secondary benefit that it makes your bank transactions simpler to follow and aggregate, why would you not do this?
Why give HMRC a reason to dig deeper, even if everything is strictly legal?
Also, I think it's good to mentally separate these two things in your head. A dividend payment is a reward for profitability, it is not a salary in any sense. You can call this pedantic, but I think it's important.
In my view, if you start to adopt a questionable practice/mindset in some areas, it will creep into other areas too.Comment
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Originally posted by jamesbrown View PostI think the pertinent question is this: given the simplicity of making separate payments and the secondary benefit that it makes your bank transactions simpler to follow and aggregate, why would you not do this? I agree with Forbes Young. Why give HMRC a reason to dig deeper, even if everything is strictly legal? Also, I think it's good to mentally separate these two things in your head. A dividend payment is a reward for profitability, it is not a salary in any sense. You can call this pedantic, but I think it's important. In my view, if you start to adopt a questionable practice/mindset in some areas, it will creep into other areas too. As I said, YMMV, and it's not something I'd lose sleep over.
For the same reasons, I trust the software to be able to unravel any complications fairly easily if I have a need to look back or if HMRC did come knocking.
Part of being a contractor is the freedom and lifestyle and part of that, surely, is being able to take the money as and when (allowing for the obvious, of course) and not alloting it to a strict "salary today, dividend tomorrow" regime.Comment
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Originally posted by JRCT View PostAssuming, for the purposes of this question, that you always stay within respective limits and thresholds and that your ltd is always in a healthy position to pay all dividends and taxes accordingly:
Do you specifically, and purposely, match up interim dividends with the actual director withdrawals that you make?
Let's say you declare a dividend of £3k each month. Do you take a corresponding withdrawal of exactly £3k, or does it end up getting aggregated with other payment activity (you pay expenses personally, you're paid a portion of salary etc) which means your actual director withdrawals might be £1k one week, then £500, then another £2k etc, etc.
I'm not worried about breaching tax thresholds or my £10k directors loan limit or anything like that - the online accounting software ensures that's not going to happen. It's more about accounting practise.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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Originally posted by northernladuk View PostWhy bugger about with monthly dividends of 3k each? Why not divided yourself the full years allowance in April and stick it in a high interest account?Last edited by eek; 12 January 2015, 18:42.merely at clientco for the entertainmentComment
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Originally posted by northernladuk View PostWhy bugger about with monthly dividends of 3k each? Why not divided yourself the full years allowance in April and stick it in a high interest account?Originally posted by MaryPoppinsI'd still not breastfeed a naziOriginally posted by vetranUrine is quite nourishingComment
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Originally posted by d000hg View PostMaybe the company doesn't have sufficient funds/warchest. Starting as new company, it would take some time to get to the point you can do that depending on your rate and bench time.Comment
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