Reply to: Wages/Dividends

[VectraMan]

And it's not £38K. Thanks to the 10% credit nonsense it's more like £35K. I took £25K in dividends last year above my minimum wage salary, which is more or less the limit.

Ideally you issue one dividend at the end of each year. But that's a bit tough for most of us. Some people say every month, some say every quarter, but I've been completely inconsistent, paying dividends as and when I feel like it.

[Bluebird]

So what do i do? Write the div's meetings minutes and fill in the vouchers retrospectively? Then write 1 big div and then none for the rest of the year? or atleast until i really need it (making sure i keep under the 38k mark?) Then keep it per quarter (like i had originally planned)?

Would i be ok?

no you write the minutes and vouchers when they are awarded, which can be as frequent or as infrequent as you like.

as long as the company is in profit

and you can go over the £38k mark - but will have to pay additional tax.

your accountant can sort it out...

[TheFaQQer]

So what do i do? Write the div's meetings minutes and fill in the vouchers retrospectively? Then write 1 big div and then none for the rest of the year? or atleast until i really need it (making sure i keep under the 38k mark?) Then keep it per quarter (like i had originally planned)?

Would i be ok?

I pay one BIG dividend at the start of the tax year, and stick it in my offset mortgage. Pay myself minimum wage monthly as well.

[Wesdev]

or should i add up all the divi's per month - write 1 certificate and voucher for that amount per month, it then keep to the plan of per quarter?

[Wesdev]

So what do i do? Write the div's meetings minutes and fill in the vouchers retrospectively? Then write 1 big div and then none for the rest of the year? or atleast until i really need it (making sure i keep under the 38k mark?) Then keep it per quarter (like i had originally planned)?

Would i be ok?

[Bluebird]

I was advised 750 month salary and 2100 month divs...

salary = anothing above min wage
divdends - will depend on your other income, but you don't really want to breach the £38 mark [ total personal income ] which triggers the normal tax on divis.

Angus, you should be ok if it's just salary & divis you get as income...

[angusglover]

I think the more frequently you take them, the more appealing you become for the tax man. Weekly used to be a no no, monthly is ok. If you can live on them being less frequent, then even better

My accountant advised to take 2600 a month divs and 440 wages a month, the wife gets 277 divs and 440 wages too. We have enough to get by, a lot less than with the old MSC....but its curbing her spending which is good

I was advised 750 month salary and 2100 month divs...

[Bluebird]

I think the more frequently you take them, the more appealing you become for the tax man. Weekly used to be a no no, monthly is ok. If you can live on them being less frequent, then even better

My accountant advised to take 2600 a month divs and 440 wages a month, the wife gets 277 divs and 440 wages too. We have enough to get by, a lot less than with the old MSC....but its curbing her spending which is good

don't forget your dividnd distribution MUST be based on your share allocation, so if you paying £2877 per month and you persoally get £2600 [ 90.37% ], then you must have 90.37% of the shares and your wife 9.63%.

[weboo]

I think the more frequently you take them, the more appealing you become for the tax man. Weekly used to be a no no, monthly is ok. If you can live on them being less frequent, then even better

My accountant advised to take 2600 a month divs and 440 wages a month, the wife gets 277 divs and 440 wages too. We have enough to get by, a lot less than with the old MSC....but its curbing her spending which is good

[Bluebird]

Taking dividends means that you are avoiding your fair share of tax.

You should not be taking any dividends at all, paying yourself through PAYE instead.

If nobody should be taking dividends why is it taxed ?

[Hector]

Does anyone know if there is limit to how many dividends you can take in a month or the amount. Is there a restriction in amount too?

Taking dividends means that you are avoiding your fair share of tax.

You should not be taking any dividends at all, paying yourself through PAYE instead.

[Bluebird]

The vouchers are to do with recording the tax relief you've rec'd so you can prove it to HMRC - bit like a payslip I would guess.

I've got share in other companies [ utilities etc ] and they always issue divdned vouchers which say they should be "kept in a safe place"

[VectraMan]

How is that fraud ?

The dividend declaration says something like "It was decided at a meeting of the board on date X to distrubte a dividend of Y". You can't pay the dividend without that (I guess that would be theft), and if you do the decleration later and put an earlier date on it then that would be fraud.

Of course, as long as it was all done before the year end you'd never get caught...

People here talk about vouchers, but SJD tell me there's no need for them. So all I ever do is sign a form, keep it with the company records and send a copy to the accountant for their records.

[FiveTimes]

Yes, but that probably counts as fraud.

All you need to do is sign a piece of paper.

How is that fraud ?

[Bluebird]

my accountant said that you can only take up to 5k per month and the rest has to be declared as a BIK? Is this correct?

Stupidly i've been drawing a few 1k divi's per month as i've been doing up the house!

you can take as much as you liek as dividend PROVIDING the company is making the profit to cover it.

What you accountant is probably refering to is the personal tax limits - once you hit about £38k [ that includes dividend, gross salary & bank interest ] then any additional you start paying tax on your dividend.