Accountant advice - Vary dividend payment

[jamesbrown]

Oh How many interim dividends are OK for very small Ltd Co | AccountingWEB especially cfield's post at the end and Page not found | AccountingWEB

although if you are using freeagent or something you will have real time accounts allowing you to calculate the available profit so even that post isn't so relevant as it was a few years ago.

Eh? Where does the post by cfield differ from anything I have said. That's precisely why I wouldn't do it (as noted above) - there's more faff, it's more easy to forget the correct paperwork etc. But the argument that a properly declared monthly dividend is going to be reclassified as salary is completely specious and I bet you have no case law to support it.

Oh, and the references to HMRC vs. PA Holdings in those links are pretty irrelevant because that was a contrived scheme that involved restructuring company bonuses as dividends. You cannot disguise salary as dividends, but frequency and amount of payment is not enough if the intent was to declare a dividend and it was lawfully declared. Again, cite case law to the contrary.

The only situation in which you would be asking for trouble, I think, is if you lumped together salary and dividends in a single payment each month, but I don't believe there is case law to support even that situation.

[eek]

For example, Richard and Julie Jones v HMRC [2014] TC04171. If a dividend has been properly declared, history cannot be rewritten.

Now give me an actual case that supports your argument.

That's to do with dividend declaration and paperwork which isn't what we are talking about.

And The request was for you to provide case law to confirm your argument which I see you agree doesn't exist when asked to provide it.

[jamesbrown]

That's to do with dividend declaration and paperwork which isn't what we are talking about.

Absolutely, that is what we are talking about. If the paperwork is correct and there are sufficient distributable profits, then they are lawful dividends, regardless of amount/frequency.

Where is your case law to the contrary?

[jamesbrown]

That's to do with dividend declaration and paperwork which isn't what we are talking about.

And The request was for you to provide case law to confirm your argument which I see you agree doesn't exist.

You can keep editing your post as much as you want, it won't make it any more coherent.

[jamesbrown]

Useful summary here, btw:

Lawfully voted dividends incapable of being reclassified as earnings - RossMartin.co.uk

There may be other, better, cases. I see Iliketax posted earlier and probably has better knowledge of the case law.

https://www.contractoruk.com/forums/...ml#post2846334

Look forward to hearing about your cases to the contrary, eek...

[eek]

You can keep editing your post as much as you want, it won't make it any more coherent.

Um I think you are the person who is confused here.

You said

"if it has the same consistency as employment income, then it must be income from employment". It's palpable nonsense, as evidenced by case law.

and I asked for the case law relation for that palpable nonsensewhich you haven't done - as the case law you have found is for the opposite where an accountant is trying to fix an illegal dividend - what you haven't shown is any case law regarding regular dividends being treated as income by HMRC as there isn't any. Which was the entire reason why I asked you to show me the case law YOU claimed existed in that post above.

You then started laughing at me as you asked me to find the case you I asked you for.

The simple fact is that you stated there is case law regarding something and I called you up on the fact that there wasn't any.


When I was checking that no case law exists before I asked for it I also found (and so posted) that accountingweb thread as it shows the exact same arguments we are having here. I then edited that post to point out that the final argument is no longer so relevant now accounting profit can be seen in real time in Freeagent.

But this current argument is completely around

1) you stating there is case law on something,
2) me asking for you to find that actual case law,
3) you providing something completely different and then asking me to find the case law you said existed and I asked you to find.

[eek]

Absolutely, that is what we are talking about. If the paperwork is correct and there are sufficient distributable profits, then they are lawful dividends, regardless of amount/frequency.

Where is your case law to the contrary?

And the OP's accountants viewpoint is that it's likely the paperwork may not be adequate if you are always taking dividends at the same time as your monthly pay.

Now if the OP is using Freeagent it really won't be a problem as the paperwork is automatically generated as you declare and take the dividend but it is probably wiser to change it just so that you don't accidently take short cuts when doing the monthly payment or end up down the line taking a dividend payment that cannot be justified.

And separating processes out is a good way of ensuring no shortcuts can occur which result in things being missed.

[TheDogsNads]

Paying yourself a monthly dividend isnt a good strategy.

Although there's nothing in statute that says dividends can \ cannot be paid at so and so intervals, if you take them monthly it starts to looks like wages \ salary.

If it walks like a duck and quacks like a duck to HMRC, guess how HMRC will treat it?

[TheDogsNads]

Useful summary here, btw:

Lawfully voted dividends incapable of being reclassified as earnings - RossMartin.co.uk

There may be other, better, cases. I see Iliketax posted earlier and probably has better knowledge of the case law.

https://www.contractoruk.com/forums/...ml#post2846334

Look forward to hearing about your cases to the contrary, eek...

FTT decisions do not set precedent.

[jamesbrown]

Um I think you are the person who is confused here.

You said



and I asked for the case law relation for that palpable nonsensewhich you haven't done - as the case law you have found is for the opposite where an accountant is trying to fix an illegal dividend - what you haven't shown is any case law regarding regular dividends being treated as income by HMRC as there isn't any. Which was the entire reason why I asked you to show me the case law YOU claimed existed in that post above.

You then started laughing at me as you asked me to find the case you I asked you for.

The simple fact is that you stated there is case law regarding something and I called you up on the fact that there wasn't any.


When I was checking that no case law exists before I asked for it I also found (and so posted) that accountingweb thread as it shows the exact same arguments we are having here. I then edited that post to point out that the final argument is no longer so relevant now accounting profit can be seen in real time in Freeagent.

But this current argument is completely around

1) you stating there is case law on something,
2) me asking for you to find that actual case law,
3) you providing something completely different and then asking me to find the case law you said existed and I asked you to find.

No, you're confused about the relevance of the case, as you were from the beginning.

Also, the idea that I cannot ask you for a similar level of evidence to support your position is extremely childish. Where is the case law that supports your interpretation of regular/consistent dividend payments being reclassified as employment income? I've asked you several times and you've provided nothing, not even something whose relevance we can argue about.