Divs\Salary

[Underscore]

As longs as my final accounts say I'm taking 10k salary and the rest as Divs, does it matter if I take out 60% each month? ie Do i have to put through a monthly dividend claim?

[Robot]

Yes, you should prepare monthly dividend meetings, if you don't these 'withdrawals' could be construed as 'net salary payments' or 'directors loans payments' in the eyes of the Inland Revenue.

Also, you should prepare monthly management accounts (back of a fag packet), to prove you had enough Profit in the company to declare the dividends in the first place.

[Underscore]

OK - I have all my accounts etc and that shows all the monies coming in and expenses going out, and it also shows payments to me for salary (at 10k per year). But my accountant just says "dont worry about it - as long as you keep 40% in your busines account I'll sort out the detail for div payments etc" So I'm actually taking out 60k per year not just 10k.

Note - this is one of the contractor accountants.

Just a bit nervous of leaving it all to an accountant.

[Robot]

So does your accountant prepare the dividend minutes for you? (Who signs them, when are they dated, is this back dating dividends?)

If yes, how can you prepare your personal tax return, if you don’t know what dividends you have declared until you have prepared your annual accounts?

Time to speak to your accountant.

[Darren at 1st Accountancy Serv Ltd]

Divis

If you keep your accountant up to date on withdrawals from the company (eg. quarterly basis when the VAT is due), the dividends can be worked out with vouchers produced as necessary for the details to go into the tax return.

[fiddleabout]

Re: Divis

Pretty laid back on it eh Darren.

In practice that is all true but if you adhere to the letter of the law there is supposed to be a meeting and minutes signed to authorise the divvi.

With my previous accountant I used to do just what you propose and they sorted out the numbers (but not the minutes) when they prepared the year end stuff.

It's even easier with my current accountant - I just email to say prepare a divvi and they send me all the paperwork to back it up there and then.

I don't do monthly divvis though - I've always felt that doing so is taking the piss a bit - most "real" companies do 2 a year - interim and final. As I've built up a bit of readies I do the same.

[mailmannz]

Re: Divis

Just because you do 1, 2 or 12 divident payments isnt going to stop Mr IR from coming in and raping you :rolleyes

Mailman

[fiddleabout]

Re: Divis

Fortunately somebody else here on the same contract and conditions as Fiddle Ltd. has just been declared outside IR35 by the IR.

Anybody wish to buy a surplus item - secondhand (unused) 1kg jar of Vaseleine?