Watch your accountants advice - the tax man could be after you

[pickle]

bums on seats

In my experience it always seems to be the "been at BT for 7 years" bums on seat contactors that decide to pay a higher salary. If you pay 5k a year salary, only claim legit expenses that you have receipt for, pay dividends twice a year, and make sure you have IR35 friendly contracts (and relevant insurance to back it up) then what’s the problem? When hector comes knocking he will find everything in order.

Running a company in a non tax efficient manner is plain stupid. Put it this way, I wouldn’t want to buy shares in your company if I knew you were p1ssing all the profits away in unnecessary tax bills.

Sort it out.

[css_jay99]

I have a quick query of my own regarding this.
Asumming I am outside of IR35.

If I pay myself say about £1000 a month. Clearly, I cant survive on this amount cos of mortgage........ and so on.

Am I allowed to take extra money out monthly and declare it as dividends ?

On the last point, do a lot of people do this

cheers

css_jay99

[deforce]

Am I allowed to take extra money out monthly and declare it as dividends ?

On the last point, do a lot of people do this

Yes, and yes.

[Pondlife]

Am I allowed to take extra money out monthly and declare it as dividends ?

My take on this is that tho technically it's not 'wrong' it does smack of being disguised salary. Personally I think you should leave enough in the company so that you can pay your overheads for the year and take divvies once a quarter. You have to be able to demonstrate that the divs were profit.

HTH

[ASB]

I have a quick query of my own regarding this.
Asumming I am outside of IR35.

If I pay myself say about £1000 a month. Clearly, I cant survive on this amount cos of mortgage........ and so on.

Am I allowed to take extra money out monthly and declare it as dividends ?

On the last point, do a lot of people do this

cheers

css_jay99

Whether you are inside or outside of IR35 makes no difference at all as to what you are allowed to do (if inside IR35 there will be a balancing payment on the deemed salary at the end of the year).

Monthly (or even daily) dividends are allowed (but anything more regular than quarterly is often frowned upon). Ensure the correct paperwork is prepared.

The IR do not know how frequently you have declared dividends anyway. This is something they discover in an investigation. Frequent declarations of dividends are not going to trigger an investigation since the IR don't know the frequency.....

[Lockhouse]

I declare my divvi's quarterly but just draw down the money from the company account monthly as it's easier to budget. Nothing wrong with that.