Payment advice (sorry newb)

[Gahoo]

Well my accountant said I could not pay myself salary as I started the contract in July. So I just pay myself a dividend each month - enough to live on.

I have not other option until I save some cash up.

[Bluebird]

Well my accountant said I could not pay myself salary as I started the contract in July. So I just pay myself a dividend each month - enough to live on.

I have not other option until I save some cash up.

Did he say why ?
Sounds like a load of b0llox to me.

[SueEllen]

Did he say why ?
Sounds like a load of b0llox to me.

Sounds odd to me as well as if a company is not making any profit how can they pay dividends to shareholders? There as if a company has any employees they always have to pay the employees wages.

[TheFaQQer]

Well my accountant said I could not pay myself salary as I started the contract in July. So I just pay myself a dividend each month - enough to live on.

I have not other option until I save some cash up.

Sounds like you need a new accountant!

By paying a salary, but leaving the money in the company, you are essentially giving the company a loan each month until it can pay you. That is no different from you loaning the company £10000 at the start and them repaying you when funds are available.

You could even charge interest on the loan to the company, but would need to declare that as additional income on your self assessment.

[Signo_cypher]

As often as you like. There is absolutely no case law or legislation stipulating how frequently you can pay dividends.

If HMRC tried to argue that dividend payment frequency had any bearing on IR35 status, the judge would laugh in their face which is probably why, as far as I am aware, it has never been raised in court as an issue.

Just to add to this, I am with one of the very popular accountants who posts on here and they advocate monthly div's to top up my 'low salary'. The key is to make separate payments for salary, expenses and dividends through the company accounts in order to differentiate.

As with everything in contracting, there is no definitive rule book, if there was I would be a millionaire

[Bluebird]

Just to add to this, I am with one of the very popular accountants who posts on here and they advocate monthly div's to top up my 'low salary'. The key is to make separate payments for salary, expenses and dividends through the company accounts in order to differentiate.

As with everything in contracting, there is no definitive rule book, if there was I would be a millionaire

Thats what I do - about 4 payments leave MyLtd account each month and arraive in the same Personal Bank A/c the same day