Second shareholder dividends - Unhappy with advice from accountant regarding

[Sausage Surprise]

My Missus has her own account...god knows I'd have been bankrupt years ago if we had a joint account. Her divi is paid into that and covers various household standing orders/direct debits so she can't spend it

[JRCT]

What if the second shareholder wasn't your spouse - just a business partner of some description?

Or what if your Ltd company had 25 or 50 shareholders?

Would they suggest that you pay all the dividends into your account and distribute payments accordingly?

That's bizarre.

[TheCyclingProgrammer]

What if the second shareholder wasn't your spouse - just a business partner of some description?

Or what if your Ltd company had 25 or 50 shareholders?

Would they suggest that you pay all the dividends into your account and distribute payments accordingly?

That's bizarre.

Why stop at dividends? What about employee wages? Why not pay all of those into your account and redistribute from there?

[tractor]

...

Hi, I've been using this forum since setting up my ltd co are year ago but this is my first post.
Some background:
I currently use one of the big contractor accountants, I'm not that happy with their fees or service so I'm thinking of changing accountants at year end (they don't know this yet). Currently if the business transfers money to my personal account my accountant automatically divides it between directors fees, expenses owed, and dividends. Apparently they then issuing the relevant dividends voucher, not that I've seen one.
They've just help me set up by wife a second shareholder (35%) so today I rang them to check the proper procedure for paying her her share. The person that I spoke at first told me that the business should just pay all money to me and then I personally transfer whatever my wife is owed from that directly to her. That doesn't sound at all correct to me so I questioned it and after speaking to one of her tax specialist she then advised that all money should be paid to a joint account, and that's what other contractors do. Again this rings alarm bells with me so I was told that my other option was that the company pays me as it does now, I then go into their money manager software and see what of that was allocated as dividends, the business would then need to pay my wife that amount and issue a dividends voucher (instead of the accountant issuing it). This sounds better - if a little messy - does it matter that my wife's voucher or payment wont happen until several days after mine?

I need to take money out to pay bills but I don't want to until I know that its being recorded correctly.

One more things, as mentioned I want to leave the current accountant at the end of the financial year. I pay them a monthly fee, should I expect the fees paid for the this year to cover the tax return which I assume will be completed a month or so after the end of year or do I need to keep paying them until it is submitted?

Thanks in advance

It seems odd that every single concern you cover above has been asked and addressed quite adequately many, many times over the past year, with enough information given in the answers for anyone (you) to become fully familiar with such matters and yet you wait until almost your year end and even after new share issues.

Whatever the extra cost, you need to change accountants now. Obviously, there will be some transactional data that you will need from them to do this so either expect extra charges or be prepared to reconstruct your current year accounts from the information that you have to hand. As long as you have all the bank statements, that is a good start. Plus, what everyone else has said.

[Jessica@WhiteFieldTax]

Very strange, and irregular advice from OPs accountant.

All valid concerns, but... change accountants now, don't wait.

^ tend to agree. It's not going to get any better.

[Whorty]

I use a small accountant over west of London and get a very personal service and excellent advice. They have a lot of experience with contractors and they always make sure I do the right thing - Robert Clow over in Northwood - give Robert a call and get this mess sorted out mate

[AndyAccountingIT]

Hi, I've been using this forum since setting up my ltd co are year ago but this is my first post.
Some background:
I currently use one of the big contractor accountants, I'm not that happy with their fees or service so I'm thinking of changing accountants at year end (they don't know this yet). Currently if the business transfers money to my personal account my accountant automatically divides it between directors fees, expenses owed, and dividends. Apparently they then issuing the relevant dividends voucher, not that I've seen one.
They've just help me set up by wife a second shareholder (35%) so today I rang them to check the proper procedure for paying her her share. The person that I spoke at first told me that the business should just pay all money to me and then I personally transfer whatever my wife is owed from that directly to her. That doesn't sound at all correct to me so I questioned it and after speaking to one of her tax specialist she then advised that all money should be paid to a joint account, and that's what other contractors do. Again this rings alarm bells with me so I was told that my other option was that the company pays me as it does now, I then go into their money manager software and see what of that was allocated as dividends, the business would then need to pay my wife that amount and issue a dividends voucher (instead of the accountant issuing it). This sounds better - if a little messy - does it matter that my wife's voucher or payment wont happen until several days after mine?

I need to take money out to pay bills but I don't want to until I know that its being recorded correctly.

One more things, as mentioned I want to leave the current accountant at the end of the financial year. I pay them a monthly fee, should I expect the fees paid for the this year to cover the tax return which I assume will be completed a month or so after the end of year or do I need to keep paying them until it is submitted?

Thanks in advance

We would recommend that amounts paid from the company match the amounts due to yourself and your wife.

We would advise you monthly of the salary and respective maximum regular dividends due (note-lower dividends can be drawn if preferred).

We would also confirm the expenses amounts to take after checking your claims as well as maintaining yearly dividend vouchers for each of you.

With regard to the company accounts, we would expect that having been paid to the year end your accountants would produce the accounts, but you would need to check with your current accountant.

[Forbes Young]

Hi, I've been using this forum since setting up my ltd co are year ago but this is my first post.
Some background:
I currently use one of the big contractor accountants, I'm not that happy with their fees or service so I'm thinking of changing accountants at year end (they don't know this yet). Currently if the business transfers money to my personal account my accountant automatically divides it between directors fees, expenses owed, and dividends. Apparently they then issuing the relevant dividends voucher, not that I've seen one.
They've just help me set up by wife a second shareholder (35%) so today I rang them to check the proper procedure for paying her her share. The person that I spoke at first told me that the business should just pay all money to me and then I personally transfer whatever my wife is owed from that directly to her. That doesn't sound at all correct to me so I questioned it and after speaking to one of her tax specialist she then advised that all money should be paid to a joint account, and that's what other contractors do. Again this rings alarm bells with me so I was told that my other option was that the company pays me as it does now, I then go into their money manager software and see what of that was allocated as dividends, the business would then need to pay my wife that amount and issue a dividends voucher (instead of the accountant issuing it). This sounds better - if a little messy - does it matter that my wife's voucher or payment wont happen until several days after mine?

I need to take money out to pay bills but I don't want to until I know that its being recorded correctly.

One more things, as mentioned I want to leave the current accountant at the end of the financial year. I pay them a monthly fee, should I expect the fees paid for the this year to cover the tax return which I assume will be completed a month or so after the end of year or do I need to keep paying them until it is submitted?

Thanks in advance

From what you say it's unclear who actually controls your company's bank account (yourself or your accountant?). If your accountants are controlling the bank account, are they a Managed Service Company Provider (MSC) so they/you are covered by the MSC legislation?
For the payment of dividends derived from ordinary shares, the dividends should be paid directly to the shareholders and the accounting transaction in your company accounts and associated paperwork should make this clear (and also differentiate between dividend payments, salary, reimbursed expenses etc)
Your last point regarding fees in advance for compiling accounts/what can be repaid to you/penalty fees for leaving your accountants etc should be stipulated in the letter of engagement that you/your accountants signed when they started acting for you.
Graeme Bennett ACMA MBA