How Do you have your Ltd Co. Setup?

[Gonzo]

Dividends can only be paid out of profit. Taking this to the extreme, you shouldn't really be paying out any dividends until you know what the company profits will be for the year. Even if the company hasn't got the cash to pay it out, I can do the dividend paperwork and take the money once the cash flow improves.

Maybe I am missing something but if the company does not have the cash then it cannot have the profit (outstanding invoices aside). If it does not have the profit then a dividend cannot be declared (unless there are reserves from a previous year). In the IT contracting line of work you can make a reasonable estimate of what the running costs are going to be over the course of a year so what is profit and what is not is pretty easy to work out.

I don't understand why are you so concerned about getting the paperwork done in advance. It takes me about 2 minutes.

[TheFaQQer]

Maybe I am missing something but if the company does not have the cash then it cannot have the profit (outstanding invoices aside). If it does not have the profit then a dividend cannot be declared (unless there are reserves from a previous year). In the IT contracting line of work you can make a reasonable estimate of what the running costs are going to be over the course of a year so what is profit and what is not is pretty easy to work out.

I don't understand why are you so concerned about getting the paperwork done in advance. It takes me about 2 minutes.

Profit and cash are completely different - Hoover in the 80s did a "free flights if you buy a Hoover product" deal. They sold lots, and made a profit - but they didn't have the cash to pay for the flights and nearly went bankrupt for it.

MyCo has made a reasonable amount of profit this year, but since it is still waiting for payment of invoices, doesn't have the cash sitting there in the bank. So, I could wait until the money is there and then do the dividend, or do the paperwork now and gradually take the money once the outstanding invoices come in. It's nothing to do with how long the paperwork takes to do, but I'd rather I paid one dividend as soon as possible rather than having to do more dividend payments throughout the year.

If I did it this way, I'm loaning the company money (since it hasn't got the cash on hand to pay the outstanding debts) and receive interest on the loan. Haven't asked the accountant about that one yet though.

[Gonzo]

Profit and cash are completely different - Hoover in the 80s did a "free flights if you buy a Hoover product" deal. They sold lots, and made a profit - but they didn't have the cash to pay for the flights and nearly went bankrupt for it.

MyCo has made a reasonable amount of profit this year, but since it is still waiting for payment of invoices, doesn't have the cash sitting there in the bank. So, I could wait until the money is there and then do the dividend, or do the paperwork now and gradually take the money once the outstanding invoices come in. It's nothing to do with how long the paperwork takes to do, but I'd rather I paid one dividend as soon as possible rather than having to do more dividend payments throughout the year.

If I did it this way, I'm loaning the company money (since it hasn't got the cash on hand to pay the outstanding debts) and receive interest on the loan. Haven't asked the accountant about that one yet though.

It sounds as though the profit is there on paper so I think you can declare that as dividend although IANAA etc etc.

A dividend can be declared out of profits but it does not have to be paid out to the shareholder(s) there and then. It can be paid in instalments if that suits.

See what your accountant says.

[VectraMan]

MyCo has made a reasonable amount of profit this year, but since it is still waiting for payment of invoices, doesn't have the cash sitting there in the bank. So, I could wait until the money is there and then do the dividend, or do the paperwork now and gradually take the money once the outstanding invoices come in.

That's assuming you get the money. Where would you stand if you paid a dividend based on the amount you'd invoiced, and then the client went bust and those invoices were never paid?

[Gonzo]

That's assuming you get the money. Where would you stand if you paid a dividend based on the amount you'd invoiced, and then the client went bust and those invoices were never paid?

That would just be a charge against future profits. Banks do that all the time.

[Maxamus]

Does anyone know of any websites where i can download excel or other format templates for businesses? Need them for my company.
Some simple ones will do. Need to start keeping records of everything

[Sockpuppet]

Literally a spread sheet for reciepts, invoices and your online bank statement will do.


Date,
Description,
Value (inc)
Value (ex vat)


for both ought to do nicely.

[Maxamus]

Still undecided on which VAT scheme to go for.....

Is it correct that is i went for the Flat Rate VAT Scheme i cannot claim back VAT on Accountacy fees, hardware, computers, software etc..?

I'll soon be buying a laptop and a printer for the business. Would i still be able to claim back the 17.5% VAT that i would pay on the purchase even if i am on the Flat Rate VAT Scheme???

[Goya]

Is it correct that is i went for the Flat Rate VAT Scheme i cannot claim back VAT on Accountacy fees, hardware, computers, software etc..?

I'd start off with getting a new accountant if this is the type of stuff you are looking for answers on.

Flat rate VAT, you claim a flat rate on expenses.

[Pondlife]

I'd start off with getting a new accountant if this is the type of stuff you are looking for answers on.

Flat rate VAT, you claim a flat rate on expenses.

No. FRVS you claim a % rate based on VATable revenue.

over period invoice for £1000 + VAT = £1,175

Vat Charged = £175

Vat Paid = £1,175 * 12% = £141

Difference = £34 which is the money you save (and will be subject to CT later)

You can clam the VAT back on certain things if an item is over £2,000 IIRC.

HTH