Backdating the dividend

[Pondlife]

The company annual accounts for the period ending 31st May 2012 have been prepared and submitted to both Companies House and HMRC.

My Self-Assessment tax return for 2011-12 is still at the draft stage...

It's not about your Self Assessment. The Company figures have already been submitted and make no mention of the dividend. This is the difference.

[d000hg]

Surely HMRC have allowances for companies who realise after the fact that they made a mistake? They must prefer you to 'fess up rather than never tell them...

[Pondlife]

Surely HMRC have allowances for companies who realise after the fact that they made a mistake? They must prefer you to 'fess up rather than never tell them...

Maybe, but it kind of smacks of "Sorry about that £40K I took out of the company and forgot about it when I signed the accounts off and so it might be a good idea if you kept a close eye on everything I do. How about we start with a PAYE enquiry or have a good look at expenses to make sure I'm on track again."

Stay off the radar! is my own personal view of these things. You might be clean as a whistle in the future but it's not worth the grief IMVHO. Don't give them any excuse. There's a (non IT albeit) guy I know who has to have a chat with the taxman every year after having a year of "admin difficulties".

[Wanderer]

kembljoe, because your accounts have been filed, I can't see how you can fix this situation.

I think any decent accountant would make it crystal clear to their client they they should take dividends right up to the limit for the company/personal tax year if profits were available to distribute. I would go and talk it through step by step with the accountant and ask them to explain why they didn't warn me against making a mistake which has cost thousands in avoidable tax. If they did warn about this then I would go back and see what they wrote at the time and try to figure out how I failed to heed their advice.

Ask them what your options are but I'm sorry to say that it looks like an expensive mistake.

Surely HMRC have allowances for companies who realise after the fact that they made a mistake?

Sure, but it would look a little suspicious if a company filed a correction to their accounts because the director of a close company mysteriously "found" a dividend voucher lying around for a £40k dividend which hadn't been properly recorded in the company accounts and hadn't been paid out to shareholders either. It could be genuine but being a close company, the suspicion is going to be that the director was trying to retrospectively declare a dividend in the previous tax year because they had made an ungodly balls up in the way they were running their company.

They must prefer you to 'fess up rather than never tell them...

There is no question of concealment here, these are retained profits carried over into the next trading year so it would have to be accounted for and paid out through the normal dividend/salary/capital-distribution process eventually...

[kembljoe]

Surely HMRC have allowances for companies who realise after the fact that they made a mistake? They must prefer you to 'fess up rather than never tell them...

I am planning to take your advice and let HMRC know about this before doing any suspicious transactions from my business account. I have valid reasons to forget to transfer the dividend allowance to my bank account:

- Health reasons which had made my life quite busy and could not find time to look after my accountancy/tax calculations.
- Did not know that I had to transfer the money till the end of the financial year as at that time I was a new contractor and that was my first year owning my company.

I will mention all the above reasons and tell them that I would like to get the dividend allowance retrospectively for the previous year by just paying the basic rate.

If that is doable from their side and if they consider my goodwill on this case, they might let me backdate the dividend, hopefully.

I do not want to make any suspicious operation as I will be applying for "Indefinite Leave To Remain in UK" a couple of months later and I don't want to be rejected due to more silly mistakes.

Hope you also think this is the best way to go with in this case.

K.

[doomage]

I have valid reasons to forget to transfer the dividend allowance to my bank account:

- Health reasons which had made my life quite busy and could not find time to look after my accountancy/tax calculations.
- Did not know that I had to transfer the money till the end of the financial year as at that time I was a new contractor and that was my first year owning my company.

These might be valid reasons for your mum, not to anyone else. It looks like you are just trying to avoid tax. I'm not sure if any of it is taken into account when applying for residency, but it is surely easier to make more money than try and recover a failed visa process?

[kembljoe]

I think any decent accountant would make it crystal clear to their client they they should take dividends right up to the limit for the company/personal tax year if profits were available to distribute. I would go and talk it through step by step with the accountant and ask them to explain why they didn't warn me against making a mistake which has cost thousands in avoidable tax. If they did warn about this then I would go back and see what they wrote at the time and try to figure out how I failed to heed their advice.

I thought my accountant was a decent one and would inform me about this and I did not have to know these kind of HMRC rules. But surely, they have not informed me via any communication method even though they have made all my profit calculations and issued a letter containing all those profit calculations..

I will immediately change my accountant as I am already paying more than 1200 pounds to them annually and still not getting these kind of advices from them and losing hell amount of money...

K.

[northernladuk]

Just go do it. It is blatantly clear you are not going to take any of the advice given and were here just to get the one answer you wanted to hear which hasn't yet been given so here it is. Go ahead and do it.

[kembljoe]

Just go do it. It is blatantly clear you are not going to take any of the advice given and were here just to get the one answer you wanted to hear which hasn't yet been given so here it is. Go ahead and do it.

I "am" taking the advices quite well and "not" transferring the money due to those advices, and in addition to those type of advices, I am also considering one more advice that was given by "d000hg".

I don't think you are able to follow what is written in these posts and behaving offensively in a subjective manner.

So please continue writing your "valuable" advices as I am really considering each one of them quite carefully and trying to act in the best way.

[captainham]

You had better be certain that you are positively, definitely, unmistakably, categorically outside IR35 before you contact HMRC, as I genuinely doubt there is a bigger red flag you can raise than what I think you are planning.