Can you draw dividends as soon as you've invoiced? and..erm..spreadbetting....

[northernladuk]

Why would that be stupid? If you have no funds personally and are confident in your ability to make spreadbetting profits, it seems perfectly sensible to me.

The OP specifically points out two options, spreadbetting and betting. I refered to the betting option. He also mentions drawing dividends before he has been paid. I would assume this practice would also lead him to be betting with money he hasn't received either which is heading for trouble I would say.

Everyone is comfortable with their ability to make profits, that is why people do it. The outcome is a different matter, doing it with company money and failing leaves the OP in a pretty dire situation. Just playing devils advocate.

[THEPUMA]

Betting with company funds? It isn't illegal but being that stupid to do it should be.

Why would that be stupid? If you have no funds personally and are confident in your ability to make spreadbetting profits, it seems perfectly sensible to me.

[IR35 Avoider]

Spreadbetting because it has the word 'betting' in it does conjure up notions of pure gambling. CFD trading on the other hand is viewed not so much as gambling but as 'trading' which is more associated with the big investment banks, exchanges, floor traders etc.

The difference between the two is that one is liable to tax and the other isn't. other than that it's the exact same instruments, the exact same charts, the exact same methods of placing trades, managing risk etc. I would spread bet if I was allowed to but clientco (IB) forbids it. So I trade using CFDs instead.

If and when I have surplus company funds I will definitely invest in funds, individual shares and a *portion* I will trade the more volatile securities (currencies, commodities). If I can do that tax free through spread betting then why the heck not!

I agree with most of what you say.

I would add that one could use a spread betting account to simulate perfectly ordinary and sensible investment activities. For example bets on index futures could be used to create a synthetic index tracker fund. The primary reason I don't do this because conventional instruments do the job more cheaply.

However the most important fact to add is that most individuals with an account eventually end up losing money. People lose so reliably that IG Index actually stated in its prospectus when it went public that it tries as far as possible not to hedge its customers bets in the underlying markets. It is so confident they will lose money in aggregate that it sees being on the other side of whatever they collectively decide to do as an important source of profit.

[ASB]

Thanks for the replys.

So from what I can tell, as long as I have sufficient reserves I can pay myself the dividends immediately. I take the point about "what if they dont pay", but they have a contract in place which means they have to pay me within 20 days of invoice, so im not so worried there (plus 2.5 years of ontime payment)

Regarding spreadbetting, actually the reason I asked, no one has touched on...
(hence im almost definately 100% wrong)
If I placed a spread/bet, and lost, your profit would be reduced, thus you would pay less tax.. i guess though.. if you won, you would end up getting taxed on it.. thus, kind of better if you lose but not... ok, apologies for the bizzarre question...

Thanks

If the SB activity amounts to a trade then it is taxable. (Currently this has not happened, though it might). What you can be sure of is that if your losses are chargeable to tax then the profits will be too.

Can't really find much reference material to point you at, but this might be a bit of a start. Are profits from spread betting always free of tax?

[jamda]

Thanks for the replys.

So from what I can tell, as long as I have sufficient reserves I can pay myself the dividends immediately. I take the point about "what if they dont pay", but they have a contract in place which means they have to pay me within 20 days of invoice, so im not so worried there (plus 2.5 years of ontime payment)

Regarding spreadbetting, actually the reason I asked, no one has touched on...
(hence im almost definately 100% wrong)
If I placed a spread/bet, and lost, your profit would be reduced, thus you would pay less tax.. i guess though.. if you won, you would end up getting taxed on it.. thus, kind of better if you lose but not... ok, apologies for the bizzarre question...

Thanks

[Jog On]

Spreadbetting because it has the word 'betting' in it does conjure up notions of pure gambling. CFD trading on the other hand is viewed not so much as gambling but as 'trading' which is more associated with the big investment banks, exchanges, floor traders etc.

The difference between the two is that one is liable to tax and the other isn't. other than that it's the exact same instruments, the exact same charts, the exact same methods of placing trades, managing risk etc. I would spread bet if I was allowed to but clientco (IB) forbids it. So I trade using CFDs instead.

If and when I have surplus company funds I will definitely invest in funds, individual shares and a *portion* I will trade the more volatile securities (currencies, commodities). If I can do that tax free through spread betting then why the heck not!

[northernladuk]

There are corporate spread betting accounts, and they do have their legitimate uses. Hedging currency risk for example springs to mind.

Doubt this was what the OP hand in mind though.

As the OP mentioned 'placed a bet' definitively I am absolutely sure he didn't. We do get quite a few of these hair brained ideas so generally have to assume the worst.

We have had so many different ideas from the ridiculous to the more practical and so far nothing definitive comes out as can be seen in the recent poll asking what we do with our companies money. No one picked any investing option, everyone either drew it out as dividends or left it there. If there was any practical working solution to maximise benefits we would all know and have jumped all over it I am sure. That in itself is evidence there is little to nothing worth doing which is a suprise and a shame.

[Jog On]

There are corporate spread betting accounts, and they do have their legitimate uses. Hedging currency risk for example springs to mind.

Doubt this was what the OP hand in mind though.

I did a bit of research on corporate spread betting accounts and they are out there. Not sure what the advantage of doing it therough the LTD is though as the funds would be liable to personal income tax when you take them out of the company unless you haven't maxed out the allowance yet.

Or are you thinking of building some extra tax free cash to keep in the company as a warchest or to perhaps invest in other types of secutrities?
Hmm interesting....

[ASB]

Betting with company funds? It isn't illegal but being that stupid to do it should be.

There are corporate spread betting accounts, and they do have their legitimate uses. Hedging currency risk for example springs to mind.

Doubt this was what the OP hand in mind though.

[Robot]

If you invoice your agency on the 1st of the month, for say £1000, and you calculate you can withdraw £500 in dividends from profit, do you have to wait for the agency to pay you, or can you withdraw the dividend as soon as the work is complete/invoiced?

Its a bit of a technicality i know, but i tend to wait until ive been paid the cash, but i get the feeling i dont have to.

I would say - It is best practice to wait until your invoice has been paid, what happens IF the client / agency doesn’t pay your invoice?

[northernladuk]

Betting with company funds? It isn't illegal but being that stupid to do it should be.

[Clare@InTouch]

You can withdraw a dividend as long as the accounts show you have sufficient reserves - this can be before you're paid a specific invoice as accounts work on an accruals basis (so long as you've raised the invoice, it's counted as sales).

As far as spreadbetting goes - as gambling winnings are tax free for a person, it makes sense to keep them outside the company just in case you're lucky!

[jamda]

If you invoice your agency on the 1st of the month, for say £1000, and you calculate you can withdraw £500 in dividends from profit, do you have to wait for the agency to pay you, or can you withdraw the dividend as soon as the work is complete/invoiced?

Its a bit of a technicality i know, but i tend to wait until ive been paid the cash, but i get the feeling i dont have to.


Also.. completely 100% random question.. has anyone ever placed a bet/spreadbet using company funds? Is this legal?

Thanks