New to Contracting

**BrilloPad** · 23 June 2015, 13:37

Originally posted by Harry Lime View Post

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks

Welcome to CUK! Hopefully your enquiry will be treated as if its in the welcome section! If not, maybe a kind mod can move it over?

What shareholding do you have in your limited company? Are you a 100% shareholder? Is your contract inside or outside IR35?

**stek** · 23 June 2015, 13:40

Originally posted by Harry Lime View Post

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks

Your accountant will issue you a dividend voucher and draw up the meeting agenda for you surely?

Assuming you have enough money accrued to pay Corporation Tax etc....

**northernladuk** · 23 June 2015, 14:14

There is a solid line between the company money and your money. They are completely different and any movement between the two must be done properly. You can not just transfer some money over.

Please spend more time talking to your accountant and understand your situation.

**TheFaQQer** · 23 June 2015, 15:23

Originally posted by BrilloPad View Post

What shareholding do you have in your limited company? Are you a 100% shareholder? Is your contract inside or outside IR35?

Those are the important questions that you need answering before you can do anything else, really.

Possible actions:

1) Take a director's loan and then repay it when you can - this could get complicated, so talk to your accountant

2) Take a dividend, subject to you being outside IR35 and being the sole shareholder. If you aren't the sole shareholder, you'll need to pay that out in proportion to the holdings. And only from profit. So talk to your accountant

3) Pay a bonus which is subject to NI and PAYE. You'll need to include this in your payroll run, so talk to your accountant or whoever does your payroll.

And welcome

**unixman** · 23 June 2015, 16:13

Originally posted by Harry Lime View Post

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

No. That would be stealing. A company is a legal entity capable of owning things. Your company owns the money in it just like you own your PC. The solution would be to pay yourself a dividend. Speak to your accountant.

**BolshieBastard** · 23 June 2015, 19:52

Originally posted by Harry Lime View Post

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks

You can transfer money from your co to your personal account anytime but there are ramifications. Obviously, there needs to be sufficient money for the company to meet its obligations such as money accountancy fees, VAT payments and end of year corp tax.

Some people go over the top here (

) about divvies and the like. Just keep a record of money over and above your 'wage' you take from the company. Your accountant should sort out the legalese at year end providing you keep records of money taken as 'divvies.'

You can take a divvie as often as you want (subject to money being available), there's nothing in statute (yet!) about only taking it 4, 6 or 12 times a year etc.

**BrilloPad** · 24 June 2015, 08:36

Originally posted by BolshieBastard View Post

You can take a divvie as often as you want (subject to money being available), there's nothing in statute (yet!) about only taking it 4, 6 or 12 times a year etc.

True. However my accountant recommends no more than 4 a year. And prefers 2 or 1 a year.

**mudskipper** · 24 June 2015, 08:39

NorthernladUK Comment generator

**pr1** · 24 June 2015, 09:11

Originally posted by BrilloPad View Post

True. However my accountant recommends no more than 4 a year. And prefers 2 or 1 a year.

presumably just to make their life easier?

New to Contracting