Question about Monthly Dividends and Ltd Company…

[Cheshire Cat]

Every time you declare a dividend you need to minute the declaration in your company books and you should also issue a tax voucher to the dividend recipient.

Its all about the audit trail: If you are unfortunate enough to be Hectored, provided you have the paperwork in place you should be OK.

Get your paperwork updated would be my advice.

Yep, get an accountant, and pay then to do this for you.
You will avoid potential costly pitfalls this way.

[Alan @ BroomeAffinity]

These board minutes, are they needed for declaring the annual dividend, or do you need to produce them every time an interim dividend was paid out?

Thing is, I paid myself various ways with my old Ltd and I didn't minute it once...

Every time you declare a dividend you need to minute the declaration in your company books and you should also issue a tax voucher to the dividend recipient.

Its all about the audit trail: If you are unfortunate enough to be Hectored, provided you have the paperwork in place you should be OK.

Get your paperwork updated would be my advice.

[Sausage Surprise]

These board minutes, are they needed for declaring the annual dividend, or do you need to produce them every time an interim dividend was paid out?

Thing is, I paid myself various ways with my old Ltd and I didn't minute it once...

NW produce them for me every month as part of their normal service. I just file them away in my little blue folder.

[ratewhore]

To echo the other responses there is no problem with monthly dividends. I was investigated by the revenue, they asked for the dividend documentation and board minutes, when I provided them they moved on.

These board minutes, are they needed for declaring the annual dividend, or do you need to produce them every time an interim dividend was paid out?

Thing is, I paid myself various ways with my old Ltd and I didn't minute it once...

[NotAllThere]

The only %ages you need to worry about is the fact that you're 90% likely to be better off through ltd with an IR35 caught contract. And 99.9% likely to be better off if your contract isn't caught.

The uncertainty relates to swapping umbrella fees for ltd co admin expenses - accountancy, statutory fees etc. It would be possible to construct scenarios where you end up worse off, but they'd be pretty extreme.

[Archangel]

To echo the other responses there is no problem with monthly dividends. I was investigated by the revenue, they asked for the dividend documentation and board minutes, when I provided them they moved on.

My company now pays quarterly dividends though, the other two months the money earns a good rate of interest in the business deposit account.

[malvolio]

Also I beleive the Tax Man wouldn't ever see when a dividend was issued, just a total for the year?

Unless of course you get investigated and even then it seems to be ok.

It's all about audit trails. As long as your annual dividend total payment is supportable by your declared post-tax profit, and the individual interim payments on account add up properly, there shouldn't be a problem. What apparently does wave flags during an investigation is people taking out routine and identical sums each period without reference to ongoing profit levels: then Hector tends to re-assess them as income on your behalf.

Then again I know of several people who simply take money out of the company account as it's needed and get their accountant to sort it into the relevant pots at year end.

[~Craig~]

Everybody is different as how much you can expect to "net" depends largely on your rate and your expenses.

I would strip out costs that you incur but which are not reimbursed such as the hotel costs but include such items as mileage and overnight allowance etc.

Between 70% and 75% seems possible but if your cotnract value is £100k pa then its going to be less as more income is taxed at 40% (if you take everything out of the company)

It really is too complex a subject to talk in general terms about but i hope this helps.

And yes, you can take monthly divis. Just make sure the paperwork is on the button.

Also I beleive the Tax Man wouldn't ever see when a dividend was issued, just a total for the year?

Unless of course you get investigated and even then it seems to be ok.

[Alan @ BroomeAffinity]

Everybody is different as how much you can expect to "net" depends largely on your rate and your expenses.

I would strip out costs that you incur but which are not reimbursed such as the hotel costs but include such items as mileage and overnight allowance etc.

Between 70% and 75% seems possible but if your cotnract value is £100k pa then its going to be less as more income is taxed at 40% (if you take everything out of the company)

It really is too complex a subject to talk in general terms about but i hope this helps.

And yes, you can take monthly divis. Just make sure the paperwork is on the button.

[johngt]

Hi Everyone,

Please help me take a decision...Been thinking about this for 3 months almost everyday and now I have to take a decision as I am going to start a new gig in April…

I have been contracting since Jan and I have been using an Umbrella Company.
My Umbrella Company charges me 5%.
In Jan I took home 73 % and in Feb I took Home 70%.
My expenses are quite high as I stay in a Hotel during the week.

I am planning to stick to contracting as I don’t enjoy doing the same thing and seeing the same people for long time.

I have been reading quite a lot of posts in this forum. But what I am not able to figure out is how much in real terms can I take home as a percentage
Of my total income is I set up a limited company ??? And would I be able to take dividends every month instead of yearly (as I am quite bad with money)?

Cheers!

John