Handling Dividends

[partimer]

monthly divs

Thanks for your response Gonzo

Yep fully aware of the incomings / outgoings situation.

I'm not taking the full amount of distributable earnings either just paying a single dividend each month to top up my weekly salary and address those monthly personal bills eg rent, mortgages etc. Probably only paying out around 50% of what is available which means for periods I am not working and not having incomings I should have sufficent profits to distribute. Hope that all made sense.

I only asked as I have friends who were paying out divs weekly and fortnightly but are now looking at moving to quarterly or half yearly payments to minimise this 'risk' but I'm not sure I could survive of the minimum salary amounts.

Cheers

I'm not saying it's right or wrong.
You've hit upon the problem with dividends.
It's suppose to be a distribution of profits so those contractors trading in their first year realistically shouldn't be declaring dividends.

You are trying to be a proper business (or give the illusion).
Now if you're unfortunate enough to be in a dog fight with Hector and in the courts. Can you imagine the sceanario. Why did you draw monthly dividends ?
Because I couldn't afford to live off the minimum wage I was paying myself ...

Aren't you treating your divs like a regular wage for an employee ... ?
You see, it's the perception. You're doing nothing wrong but the current government is treating tax avoidance and tax evasion, the same. There in lies the problem.

The only route is "don't get in a battle with Hector to begin with".
It's how the individual contractor feels about risk.

[minstrel]

It's suppose to be a distribution of profits so those contractors trading in their first year realistically shouldn't be declaring dividends.

Just because the first year annual accounts haven't been drawn up doesn't mean the company is not in profit during the first year and able to distribute dividends.

Surely whenever your company's YTD balance sheet shows the company is in profit the Directors can legally choose to make a dividend distribution?

[JKnz]

I'm not saying it's right or wrong.
Can you imagine the sceanario. Why did you draw monthly dividends ?
Because I couldn't afford to live off the minimum wage I was paying myself ...

Or how about because shareholders would rather see excess funds distributed out of the company if they are not going to be used by the company for further investment providing a profitable return.....

[2uk]

Have you considered changing banks? No need to stay with HSBC!

You're throwing money away!

They offer 18 months free banking and I bit.

[max]

They offer 18 months free banking and I bit.

oh please...abbey is free... I suspect lots are. Change banks!

Here's the website

http://www.anbusiness.com/

I've used them for 5 years+...never paid a penny for anything. Got great interest on the reserve account, online works fine, and no stuff ups.

[2uk]

oh please...abbey is free... I suspect lots are. Change banks!

Here's the website

http://www.anbusiness.com/

I've used them for 5 years+...never paid a penny for anything. Got great interest on the reserve account, online works fine, and no stuff ups.

Thanks , I will have it in mind. I am going to doublecheck everything with HSBC.

[Bluebird]

Don't forget whether you pay your dividends Weekly, Monthly or Annually, they have to backed up by :

1. Sharholder Meeting Minutes
2. Dividend Tax Vouchers

These MAY be produced by your accountants, but you need to check.

[JKnz]

Don't forget whether you pay your dividends Weekly, Monthly or Annually, they have to backed up by :

1. Sharholder Meeting Minutes
2. Dividend Tax Vouchers

These MAY be produced by your accountants, but you need to check.

Why would you need shareholder meeting minutes for a dividend? Given its the Directors choice to declare a dividend wouldn't it be a directors meeting you would want minutes for??


Also, heres a strange one.......received an email from an 'accounting firm' who informed me that if your company only has 1 sole director then you don't nneed to draw up any directors meeting minutes.....hmmm doesn't sound safe to me.

[Bluebird]

Why would you need shareholder meeting minutes for a dividend? Given its the Directors choice to declare a dividend wouldn't it be a directors meeting you would want minutes for??


Also, heres a strange one.......received an email from an 'accounting firm' who informed me that if your company only has 1 sole director then you don't nneed to draw up any directors meeting minutes.....hmmm doesn't sound safe to me.

Yep, you could be right.

I'm just trying ot be helpful, the point being is that you can't just go off and do these things without a paper trail - many new to running ltds may not get that sort of advice from their "accountants" who a few weeks ago were MSCPs.

[JKnz]

Agree Bluebird but i think we need to be careful with any advice given on here too.

I went back to the so called 'accounting firm' who gave me that info and they fed me some more rubbish along the lines that since I was the only director then why would I need to keep directors minutes and to whom would I need to show them To this I replied....'HM Revenue and Customs may be interested' ....yet to hear back