Do I legally have to leave the Tax and VAT in the limited company?

[malvolio]

P.S. Please speak to your accountant in detail about this before it's all too late. If you're paying them, this is basic advice you should be receiving from them. They'll be able to explain in much more detail about the implications and how things work!

Agreed. Our concern is not so much the mechanics of what is being proposed by the OP but their apparent total ignorance of how it is all supposed to work.

[JackD]

Not sure what you mean but if you're under the impression that profit is calculated inclusive of VAT then that's not correct. The basics of working out the maximum dividend you can declare is:

Sales (excluding VAT) = A
Expenses (excluding VAT) = B
Profit/Loss = A - B = C
Corporation Tax = C x 19% = D (If C is a profit)
Retained profit/loss = Maximum Dividend = C - D = E

Yeah that’s what I thought - the £11k figure used in my original post and your previous comment was inclusive of VAT. So my maximum dividend would be lower