Leaving tax money in your company account...

[SallyAnne]

Morning all!!

It's probably too early for serious posts, but what the hell...

I'm interested in the way people run their businesses <resists urge to put quote marks round the word businesses>

By law you are supposed to always leave enough money in your company account to pay all your taxes for the year....do we all do this?

I must admit, I wish I did...but I tend not to. I know I should only take £3k a month out, let the rest mount up, pay everythin online, in advance, eat my greens etc etc but I just can't seem to be that responsible! I normally find myself in the situation where once a year I have 2 or 3 months where I'm mega skint, as I have my corp tax bill to pay, a late VAT bill (with fine), 6 months paye etc etc, and nowt in my company account, so "this month's invoice" normally goes straight onto these bills.

Is anyone else as useless? Or have yous learned how to take this more seriously?

[oracleslave]

Is anyone else as useless?

Err....

In all seriousness I am mostly good with this and pay it all on time and ensure there is always sufficient to meet the tax,vat demands etc.

[MrRobin]

Good question SA. I didn't realise you were legally required to keep a reserve of tax money to be paid at the right tiome... I just do what you do - pay out of the next month's invoices! Surely large, multi million turnover companies do similar things too??

[MrRobin]

Err....

In all seriousness I am mostly good with this and pay it all on time and ensure there is always sufficient to meet the tax,vat demands etc.

Yeah there is always enough, when it is due for payment, but if I were asked half way through the year to show the money I have been putting aside so far for payment of tax in 6 months time, I wouldn't be able to.

[SallyAnne]

Good question SA. I didn't realise you were legally required to keep a reserve of tax money to be paid at the right tiome... I just do what you do - pay out of the next month's invoices! Surely large, multi million turnover companies do similar things too??

SJD reckon it's illegal to take divvies if you dont have enough money for tax.....they probably mean at the end of the year like, but the way they say it implies keeping the money in year month by month.

At least I'm not on my own

I'm really going to try and be responsible this year - I've bought a wall planner for my office and everything

[lilelvis2000]

I have to keep a tight ship..otherwise the wife will spend it all on Monet. Whatever that is?

[Bumfluff]

I run a tight ship always have in the company account what I owe

[MrRobin]

SJD reckon it's illegal to take divvies if you dont have enough money for tax.....

Hmm.. well if you took divvies with the knowledge that there would be no more money coming in for the rest of the tax year and then you wouldn't be able to pay the tax then fair enough, you are spending money that isn't yours - it belongs to the taxman.

Some accountancies are geared up to assuming you take the full amount possible in divvies each month with your salary tho.. I don't do that - I take a divvy when my company profits are doing well and there is a steady stream of income coming in now and for the forseeable future.

[SallyAnne]

Some accountancies are geared up to assuming you take the full amount possible in divvies each month with your salary tho.. I don't do that - I take a divvy when my company profits are doing well and there is a steady stream of income coming in now and for the forseeable future.

So do you pay yourself a decent wage all year round then?

[tay]

I didnt even realise people took money out that was set aside for tax

I always make sure I ahve planety in my company account to cover tax bills, would hate the thought of giving money to the govt in penalties, or losing sleep over owing money.

I just pay myself the max dividend applicable for my circumstances (24k Each year for me) at the first opputunity and then budget it out for personal use throughout the rest of the year. I am quite fiscally disciplined though.