Paying dividends and leaving enough for the tax man

[Olly]

yep it's how I thought it worked either and my accountants gave me no clues otherwise when I was in a similar predicament.

Basically though, declaring the dividend is a paper shuffling exercise then you immediately loan the money to your Ltd.

Can't imagine hector is happy about it as presumably your Ltd has no need of the loan but it's been mentioned on here a few times, even by the accountants.

[PAH]

Would that work? I thought I'd actually have to receive this money in my personal account before 5th April in order for it to fall under my 2009/10 tax year?

From memory of doing something similar a few years ago, the dividend is declared on your self-assessment for the same tax year it was declared by the company, so the actual transferring of money has no relevance as it's treated as already having been taken, and any tax paid accordingly.

[THEPUMA]

A final dividend can be declared but not paid. An interim dividend must be paid. But transferring the amount to your director's current account counts as being paid. So you could simply declare the dividend without paying it if you word the documentation correctly. Fire me a PM and I'll email you a template.

Or you could just pay it and use the outstanding invoices to pay the CT. That's what i would do.

Cheers

PUMA

[malvolio]

You pay divis out of available profit. You are also legally bound as a Director of a limited Company to trade solvently and prudently, which means ensuring you retain enough clear funds to cover any known liabilities - and that includes upcoming CT. But Philip Green paid himself a £1.2bn bonus against a less than £1bn profit in 2008 using agreed profits guaranteed to be available in 2009. (he gave it all to his wife, incidentally, and paid no tax on it, but that's another story)

So yes you can juggle things around on occasion, but you have to be fully aware of the risks involved. Get it wrong and HMRC will bite, hard.