Ok - i'm new in business. Private limited - one man show. Upto what percentage of the net profit one can declare dividend - could it be 80-90%? And can one work it out on a monthly basis? Thanks.
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Of your net profit, 100%. You can work it out however you like but some people think paying monthly dividends can attract the attention of HMCR and there have been cases whey they have reclassified regular as clockwork dividends as income. Other people say this is extremely unlikely. Best thing is if you want to be seen as a real business then operate like a real business and pay dividends no more than twice a year... interim and final amount.Originally posted by dada2Last edited by Lucifer Box; 12 September 2005, 18:19. -
Dividends
Of your net profit, 100%. You can work it out however you like but some people think paying monthly dividends can attract the attention of HMCR and there have been cases whey they have reclassified regular as clockwork dividends as income. Other people say this is extremely unlikely. Best thing is if you want to be seen as a real business then operate like a real business and pay dividends no more than twice a year... interim and final amount.
How can this be worked when you need to take @70% of the net profit on a monthly basis to cover your personal outgoings? Can you take a director's loan(s) from the company and repay this with the dividend amounts over the financial year so you're not skint in the months until you take the 1st dividend or do you need to cover this yourself?
Maybe I could sell my personal assets (PC's, Laptops, Office equipment to the business when I go Ltd next week? (currently working under an umbrella so am getting the full amount each month but am paying thru the nose in the tax and NI area for the privelidge)
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Yes to both. You can take a loan from the company and sell some assets to it to raise some personal cash.Comment
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