Refund Interim dividends

[LandRover]

Thanks in advance for advice...

Can I repay interim dividends that I have taken from my Ltd company?

And if so how is this done? Simply pay from private bank account to Ltd company account?

[Lance]

Thanks in advance for advice...

Can I repay interim dividends that I have taken from my Ltd company?

And if so how is this done? Simply pay from private bank account to Ltd company account?

Yes you can. Exactly like that.
If it was in your personal account for short-term then you may be better off classifying as a loan (but check with your accountant).

Mind you I don't really understand why interim dividends are used. It smells like a lack of planning (and refunding them confirms it). Why not simply pay dividends when there is sufficient profit in the company and you need it?
There is a small risk that using interim divis and refunding them, if done a lot, is abusive avoidance and they should have been listed as loans anyway.

[Major Hassle]

http://www.companybug.com/guide-to-i...to-avoid-them/

As per Lance and a link to the same subject found with a quick Google

[LandRover]

Yes you can. Exactly like that.
If it was in your personal account for short-term then you may be better off classifying as a loan (but check with your accountant).

Mind you I don't really understand why interim dividends are used. It smells like a lack of planning (and refunding them confirms it). Why not simply pay dividends when there is sufficient profit in the company and you need it?
There is a small risk that using interim divis and refunding them, if done a lot, is abusive avoidance and they should have been listed as loans anyway.

I use interim dividends purely for convenience of having a money regularly, which helps me manage my bills better. I suspect most contractors take monthly dividends. Its just that I have been fortunate to have been given some money and I thought why not pay back my dividends and reduce my tax liability.

[Lance]

I use interim dividends purely for convenience of having a money regularly, which helps me manage my bills better. I suspect most contractors take monthly dividends. Its just that I have been fortunate to have been given some money and I thought why not pay back my dividends and reduce my tax liability.

You'll be OK with it as a loan if just a one off.


For what it's worth.... Weaning yourself off the teat of monthly income is good.
It aids financial planning.
Also makes benchtime much easier to sustain financially.
And helps build a bigger warchest as well.
I do 3 or 4 divis per year, and when I do 4 it's because I failed to foresee something that I probably could have done if I'd though about it better.

[northernladuk]

I use interim dividends purely for convenience of having a money regularly, which helps me manage my bills better. I suspect most contractors take monthly dividends. Its just that I have been fortunate to have been given some money and I thought why not pay back my dividends and reduce my tax liability.

Why isn't your accountant providing you tax planning to withdraw the dividends in the most efficient manner even if you've been given some money and may not need it and if you aren't sticking to it why aren't you using them to help you make sure you don't get stung?

I wouldn't assume that's what most contractors do. The smart contractor would be withdrawing the max dividends as soon as they can, the total lot on the first possible day if funds allow. Might as well get it out of the business bank earning nothing and get it in to something that might earn some interest. Takes a bit of personal budgeting but it's not rocket science.

[malvolio]

I use interim dividends purely for convenience of having a money regularly, which helps me manage my bills better. I suspect most contractors take monthly dividends. Its just that I have been fortunate to have been given some money and I thought why not pay back my dividends and reduce my tax liability.

Don't really understand finance, do you...