End of year advice for ltd co needed!!!

[ObieNoGimmicks]

Re: self assessment

my year ends feb 16th, i have only been contracting/running a ltd co for this 1 year.

what return are you talking about?

regarding divis, i just complete a dividend form that the accountant snet me, these are kept for my own records tho, they are never forwarded to anyone ... should they be!??

[Martin Underwood]

One born every....

"41K, plus my 8K salary"
Oh dear. Seems like you fell for that old line "pay yaself bare mininum wages and take the rest as divis and bobs yer uncle!"... to which we say: what a divvi!

Firstly:
Your accountant has hopefully accounted correctly for the PAYE element of the 8K salary.

Next:
If you've been contracting for one year, your COMPANY year end is presumably around the corner... but the corp tax for this does not need to be paid for another 9 months, which probably explains your accountant's quietness about this.

Next:
Your PERSONAL tax implication.
How much of your dividend income was incurred between 6th April 2003 and 5th April 2004? It is that income that you need to pay tax on by next week.

Finally: if you have salary of 8K and dividends of 41K, your gross income is not 49K... it is nearer 54K (because 41K dividends is a NET distribution; the gross is 45.5K).

[ObieNoGimmicks]

Re: no sh^t

planetit:-


i was permanent up until january 04, i then started contracting at the end of jan 04 ...thus my year end coming up now




(WTF do accountants do!)

[ObieNoGimmicks]

Re: One born every....

thanx for the advice

mucho apprecaited!

[Mustang]

Bear with it....

No advice to give on your original post but just wanted to comment on your view of some of the advice.

Bear with it!

I have made a few posts now (I am also relatively new to contracting) and received a lot of good feedback. Some sarcasm but mostly great advice. My personal view is that:

1) It's a harsh world out there with with a number of minefields to negotiate on the way. The IR and other factors make it hard on everyone so after several years exposure, I am not surprised people develop their more cynical side. Maybe we will too.....?!

2) After reading a lot of entries here on this bulletin board, there are a fair amount of idiots around too! Some just come across that way and others are the genuine article. The latter being more worrying since they give contractors/freelancers a bad name! >:

3) A lot of people request basic advice (including me) because there is a lot to take in when you set off. Anyone going out on their own is fooling themselves if they are doing it to just make a "quick buck"!

I for one, appreciate the advice this site gives me, and grit my teeth when I read sarcasm but understand where they are coming from. Thanks to those that have helped me and those that will in the future!!

Hope you resolve your original issues with your accountant.

[malvolio]

Agreed...

Totally agree. I confess to smacking Mustang down with his first set of questions, but he (I assume he - she may not be, of course!) managed to glean the good advice from the "here we go again" snide comments.

Basically if you know the answers (a) you're almost certainly a cynical old git, (b) you 've forgotten how hard it was to find them out in the first place and (c) I work for a living so why should I sell my information for free.

And get an accountant that does both sides - mine costs £75 a month (probably too much but it's not worth changing) plus another £75 for my annual SA form and another £75 for the company returns. About two days gross income, so I don't really care.

Don't know what yours is charging, but it would appear to be too much - he is supposed to be a service provider, after all.

[lilelvis2000]

54K...bloody heck... and here I am chugging along at a meagre 18K to live on.. Well, okay, so the rest will come out after April 6.

Sal.

[Rhino]

Another thing that I don't think I saw when hastily reading through this thread.....been to the bloody dentist again

£49K dividend will cost you dear personal tax wise unless you shared the dividend with another shareholder.

Did you say you had A N other shareholder to share the divvy with ?

[Mustang]

Freq and amount

Reading this through again something came to mind that I thought I had read about.

If you pay yourself a dividend more than 4 times a year you raise suspicion with the IR. By paying yourself a dividend monthly, the IR may deem it (in the infinite?!) wisdom as being a "salary in kind" and tax you on it as if it were salary.

I am sure I will be corrected if I am wrong!!

[planetit]

Re: Freq and amount

There was a discussion about this recently. Although most people avoid paying monthly dividends, no one (including some accountants) had ever heard of a contractor getting into trouble for doing it.

If you think about it, the IR have no way of knowing that you are paying dividends monthly unless they have already started an investigation.

Still best to avoided, if you ask me.