Tax Computation

[stimac1]

I have drawn all funds (£120,000) from my company during the course of the last 12 months. £20k of this as travel expenses .

What is the best way to account for this to reduce tax. Should all of the drawing be as dividend?

[Manic]

This is a joke right?

[Pondlife]

[Sockpuppet]

I have drawn all funds (£120,000) from my company during the course of the last 12 months. £20k of this as travel expenses .

What is the best way to account for this to reduce tax. Should all of the drawing be as dividend?

20k as travel expenses.

Leaves £100k.

Take £6035 as PAYE

This leave £94,000.

Take rest as dividend. This will put you into higher rate tax bracket.

I am assuming that this is retained profit and you have left enough for corporation tax if you plan to take this as a dividend (which can only be taken from profit).

If this isn't retained profit/you've left enough you need to take thde £100k as PAYE and lose about £55k in PAYE/NIC tax on it.

I'd ask an accountant ASAP.

[Turion]

It's fixable, but talk to accountant asap as you need to sort this. If you've emptied the co bank account you will be needing to put put some back in order to at least pay the corp tax.

You can allocate say 6k for you and partner as salary for a start. Then shift some more with divis. The rest could be categorised as a loan that you can pay back into the co when the tax is due.

[ChimpMaster]

Go to Cuba, they won't catch you there.

Don't feed the Troll.

[chris79]

20k travel expenses? Were you flying to Dubai and back every day?

[pmeswani]

I have drawn all funds (£120,000) from my company during the course of the last 12 months. £20k of this as travel expenses .

What is the best way to account for this to reduce tax. Should all of the drawing be as dividend?

State that you bought some shares in some Cuban Cigars and the company went bust... therefore lost all the money. HMRC won't ask any questions... honest they won't.

Seriously, unless you have special dispensation, or prepared to declare a huge amount as a director's loan and pay some of it back soon, you are screwed. I can only assume that you haven't spoken to an Accountant at any point to discuss how to best manage your money. I can also assume that you are not VAT registered, and if you are and you haven't left any money in your business to pay the VAT man, you are equally screwed....big time. I would seriously look at speaking to an Accountant soon and work out how to dig yourself out of the hole you have dug yourself into.

[Pondlife]

20k travel expenses? Were you flying to Dubai and back every day?

4 nights a week in a reasonable hotel in a major city would cover most of that.

[Turion]

4 nights a week in a reasonable hotel in a major city would cover most of that.

Then add for flights, mileage, trains, hirecars, parking etc. and its easy to rack up a whole lot more. I certainly do.