Illegal dividend payments & Co profits

[The Lone Gunman]

Not qualified:
I think divvies can be paid before profit is made as long as you can show that it was a responsible payment. ie. projected earnings less projected costs = projected profit. Paying out 20 percent of said profit would be reasonable.
Dont know what happens if it all goes pear shaped mind.

[ASB]

Thanks, ASB - that answers a question I've not got round to asking. This means that at the beginning of 2008/9 (which coincides with the beginning of my Ltd.'s 2nd year, I can pay myself a big wad of divis up to the higher rate limit (minus planned salary for the year) - as long as VAT and CT obligations are still in my account. Or have I got that wrong?

http://moneyterms.co.uk/distributable-reserves/

I am not quite sure what you intend but it sounds fine. Essentially if you have a retained profit from previous years at that point of x you can pay those out as dividends at any point in the future (any vat CT or other liabilities will already have been accounted for in the accounts at this point).

[Old Greg]

http://moneyterms.co.uk/distributable-reserves/

I am not quite sure what you intend but it sounds fine. Essentially if you have a retained profit from previous years at that point of x you can pay those out as dividends at any point in the future (any vat CT or other liabilities will already have been accounted for in the accounts at this point).

Cheers - I'll run it past my accountant 1st, but it's good to discuss these things for my own understnading.