Newbie questions

[conqurer]

Hi,

I have recently started contracting and need some help:

1. I applied for VAT registration on 10th of April. Can I apply for FRS scheme before getting the VAT registration number? Or should I wait to hear from HMRC about my VAT application first?

2. Can someone please guide me about how shares are allocated for the purpose of paying yourself dividend.

3. If I decide to pay myself dividends every month, do I need to pay CT every month as well?

Regards.

[DaveB]

Hi,

I have recently started contracting and need some help:

1. I applied for VAT registration on 10th of April. Can I apply for FRS scheme before getting the VAT registration number? Or should I wait to hear from HMRC about my VAT application first?

2. Can someone please guide me about how shares are allocated for the purpose of paying yourself dividend.

3. If I decide to pay myself dividends every month, do I need to pay CT every month as well?

Regards.

I'm guessing you don't have an accountant. If you need to ask these sort of questions you should get one.

For the record.

1) You apply for the FRS after you are VAT registered and have your registration number.

2) Allocate shares any way you like but dividends must be paid in proportion to the number of shares held. eg.

You hold 2 shares, business partner holds one share.
Total number of shares issued =3.
Total dividend available to be paid £6000

Divide the total dividend available (£6000) by the number of shares (3) and pay one one dividend unit ( £6000/3 = £2000) per share owned.

So you get 2x£2000 = £4000
Partner gets 1x£2000 = £2000

If you are the only shareholder you get all the dividend regardless of the number of shares you actually have.

3) You can pay CT any time after the end of your accounting period but the deadline after which penalties are imposed is 12 months. IIRC HMRC will pay interest on early payments but you'd be better of keeping the money in a high interest account for as long as possible.

Note: I am not an accountant. Get yourself one.

[FiveTimes]

Hi,

I have recently started contracting and need some help:

1. I applied for VAT registration on 10th of April. Can I apply for FRS scheme before getting the VAT registration number? Or should I wait to hear from HMRC about my VAT application first?

Regards.

If you get a reference number from the revenue regarding your first application and write it on your application for FRS then they said they will link them together and register you.

[Ruprect]

Blimey you are green. Have you even looked at hmrc.gov.uk?

Get an accountant - they will sort all this out for you anyway.