Reply to: P11D vs Accountant

[Gonzo]

I'm not sure if we have had the answer to this but do accountants not provide a minutes of meeting and a dividend voucher

I would have thought that the minutes of the meeting declaring the dividend have to be signed by a Director or the Co Sec. If the accountant does this on your behalf does that not put you into the MSC realm?

MyCo's accountant provided a template word doc for the dividend meeting minutes, I just amend that, sign it and send it to them.

I have no idea if they produce a dividend voucher from that, but then they do my personal tax too so I would have no need to see it.

[THEPUMA]

Blimey. I'm less clear now than I was before

So, for the 10 mostly identical, regular payments that I made in 07/08 is it worth me doing the paperwork still? And do I have to do one set for each?

Thankfully I haven't paid myself one yet in this year, so I will get it right from the start this time.

You could theoretically argue that every time you made a dividend payment, you made a conscious decision to pay a dividend and given that you are the sole director (?), that decision constituted a quorate director's meeting. You could therefore minute today the meetings that took place on each of those occasions.

That's probably your best bet although it's not the most robust line of argument I've ever heard.

[Gros]

Blimey. I'm less clear now than I was before

So, for the 10 mostly identical, regular payments that I made in 07/08 is it worth me doing the paperwork still? And do I have to do one set for each?

Thankfully I haven't paid myself one yet in this year, so I will get it right from the start this time.

[Lewis]

I'm not sure if we have had the answer to this but do accountants not provide a minutes of meeting and a dividend voucher

Surely this is juts a case a running it from an accountancy software

In addition , if I was paying 95 quid a month , I would expect this
What would be the point of getting an accountant , if I was'nt get some tax planning advice at the minimum once every three months at least

ps as a aoctractor 1500 - 2300 is way too much

Some do some don't. The link I posted earlier had some templates I think. If not do a search here for dividend voucher and you will find one. In the past my accountants have produced them for me. Now I do them myself and send a copy to accountants. It's really very simple. You just have to replace the date and amount each time.

I currently pay £850 (inl. VAT) for accountants who do all I need.

[ASB]

and he could still decide that routine payments regardless of actual trading position were salary rather than divi - although that would be a dificult one to make stick

You often assert that. Can you point to a shred of evidence of it actually happening - subject of course to the proviso that the dividend had been declared properly ?.

I'll sit back and wait for the link to the case - but it ain't going to happen because there is no chance of HMIT winning. I have, of course fetched my hat just in case in I need to eat it .

[sidknows]

I'm not sure if we have had the answer to this but do accountants not provide a minutes of meeting and a dividend voucher

Surely this is juts a case a running it from an accountancy software

In addition , if I was paying 95 quid a month , I would expect this
What would be the point of getting an accountant , if I was'nt get some tax planning advice at the minimum once every three months at least

ps as a aoctractor 1500 - 2300 is way too much

[BoiledSpastit]

Accountancy Rates?

What is a typical accountancy rate: I'm getting billed yearly and its always been over £1500 inc vat. Last year it was £2300 because the revenue had a bunch of questions, which my accountant handled for me. Am I being ripped off?

[malvolio]

Chuckle! Chuckle!

Convenient little side step pretending this is what you meant but this approach clearly doesn't address Gros' issue of having to go back and write dividend documentation that should have been created at the time, which is what was under discussion.

btw continuing with that idea and I have no idea if what you and Archangel say about advance declaring is correct or not. Assuming you know your stuff and it is, I see little value in doing it for the typical contractor. Why would you want to declare in advance your dividends which then locks yourself into paying that when you don't know what might change over the coming year.
I'd say better to declare multiple dividends over the year as and when you need them. It has the same "floating reserve" effect and doesn't restrict your options as the year progresses.

Not a side step, it's how I worked for around 10 years. Had a bit of a break so it's back to the traditional fund-building route now. However, I was not "pre-declaring" anything, I was declaring that year's dividend based on that year's trading figures and net profit, then taking the funds as and when necessary; i.. working a year behind, not a year ahead. I could as easily have taken them in one year end spluge, but that leaves the company light on liquidity and I'd rather not have to put money back in.

Secondly Hector only sees your year end figures, he won't see your General Ledger: he will look at dividend payments only if he launches an investigation, and he could still decide that routine payments regardless of actual trading position were salary rather than divi - although that would be a dificult one to make stick

[ASB]

Why would you want to declare in advance your dividends which then locks yourself into paying that when you don't know what might change over the coming year.

You could actually "pass" the dividend if trading conditions worsened between the declaration and due date, thus it doesn't tie you in.

Of course you are quite right, multiple dividends is normal. Most of the (real ) companies I hold shares in will pay dividends half yearly, generally an interim based on trading to date and their anticipation of the rest of the year (typically about 1/3rd or the total) - then a final. I do have a couple that paid quarterly and did have some that paid monthly (though these were set up with a very specific objective of how the returns were distributed to the shareholders).

[Lewis]

Not at all. How about if you declare your dividend at year end, when you know your available net profits accurately, and pay it out over the following year in order to keep a floating reserve in the company?

What? You can't afford to do that? How sad...

Chuckle! Chuckle!

Convenient little side step pretending this is what you meant but this approach clearly doesn't address Gros' issue of having to go back and write dividend documentation that should have been created at the time, which is what was under discussion.

btw continuing with that idea and I have no idea if what you and Archangel say about advance declaring is correct or not. Assuming you know your stuff and it is, I see little value in doing it for the typical contractor. Why would you want to declare in advance your dividends which then locks yourself into paying that when you don't know what might change over the coming year.
I'd say better to declare multiple dividends over the year as and when you need them. It has the same "floating reserve" effect and doesn't restrict your options as the year progresses.

[TheBigYinJames]

What? You can't afford to do that? How sad...

I don't pay myself divis, so it means nothing to me

[malvolio]

Not often you see the malvolio dented.

Not at all. How about if you declare your dividend at year end, when you know your available net profits accurately, and pay it out over the following year in order to keep a floating reserve in the company?

What? You can't afford to do that? How sad...

[Archangel]

p.s. <removed>

But a dividend can be declared annually, and then paid out quarterly (i.e. not the other way around).

[ASB]

ASB referred on another thread to the problems he had at an employer compliance review due to problems with dividend paperwork.

I perhaps wasn't entirely clear there, the problem I referred to was with a different client of my accountants and this caused them to remind all clients of the need for the documentation to be correct and contemporaneous. but the point remains - if it isn't properly declared at the correct time and minuted then it isn't actually a dividend.

As an aside I receive a dividend payment from an investment trust I invested in. It turned out a year of so later that because of some issues it was improperly declared - or maybe there wasn't the distributable reserves (it was some weird technicality which went way over my head) - so it wasn't a dividend at all. It was a dreadful (and expensive) mess for them to sort out.

[TheBigYinJames]

Not often you see the malvolio dented.