Originally posted by VectraMan
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Collapse
You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:
- You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
- You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
- If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.
Logging in...
Previously on "Does Director Loan Account and Dividends go hand in hand?"
Collapse
-
-
Originally posted by tyut4669 View PostIf I payback the director loan (way more than 5000 mark) with the interest within the accounting period, does P11D still apply along with the payment of employer class 1 benefit NI?
Leave a comment:
-
Is P11D applicable if I payback the director loan within the accounting period?
If I payback the director loan (way more than 5000 mark) with the interest within the accounting period, does P11D still apply along with the payment of employer class 1 benefit NI?
Leave a comment:
-
Originally posted by tyut4669 View Post"If the business account have distributable profits of 10000 pounds, and has paid director 10000 pounds as director loan. Since company does not have any more money in the account now, can it declare dividends of 10000 pounds to clear off the director loan?"
If you have retained earnings of 10,000 you can do as you wish. If you don't then you can't. The latter looks more likely from the information given.
Leave a comment:
-
The freedom within DLA is no longer as attractive as it used to be. For instance the £5K limit is only available from a Benefit aspect via your P11D, any overdrawn DLA will give rise to a S419 on the company CT600, which results in further corporation tax, granted this can be reclaimed in later years but only if you put the money back in the company.
My advice, pay yourself dividends when the profits are there. It’s at the end of the year that your accountant may be able to use the DLA to your advantage.
Leave a comment:
-
Originally posted by tyut4669 View PostThanks for the quick replies guys. Much appreciated.
It looks like people seem to agree on the way I withdraw funds and keep filling it back with dividends (refer to my 2nd question). Can an expert please comment on my original question?
"If the business account have distributable profits of 10000 pounds, and has paid director 10000 pounds as director loan. Since company does not have any more money in the account now, can it declare dividends of 10000 pounds to clear off the director loan?"
I meant to ask since it has already paid 10000 director loan, does the director loan given out constitute as part of profits to be able to declare dividends then?
Leave a comment:
-
Thanks for the quick replies guys. Much appreciated.
It looks like people seem to agree on the way I withdraw funds and keep filling it back with dividends (refer to my 2nd question). Can an expert please comment on my original question?
"If the business account have distributable profits of 10000 pounds, and has paid director 10000 pounds as director loan. Since company does not have any more money in the account now, can it declare dividends of 10000 pounds to clear off the director loan?"
I meant to ask since it has already paid 10000 director loan, does the director loan given out constitute as part of profits to be able to declare dividends then?
Leave a comment:
-
Originally posted by VectraMan View PostI suppose so, but like most I pay expenses and salary, then treat 79% of what's left as available to pay as a dividend. I guess there may be personal reasons why you'd need the extra short term and dip into your CT and VAT money, but it seems strange to operate like that all the time.
And, BTW, taking everything out of the company is actually not such a smart idea unless you're planning on never being out of work or going sick.
Leave a comment:
-
Originally posted by Sockpuppet View PostBecause the profits may not be there at the time the load was made hence no possible to take a dividend.
Leave a comment:
-
Originally posted by VectraMan View PostYes, but why? Why not just declare the amount you're making as a loan as a dividend in the first place?
You're doing exactly what I do.
I have a DLC (Sage code in the 2100 range).
Everything gets posted it it, wages, expenses, dividend payments (ovbiously with the other side of the transation in the correct code). It then shows me how much I owe or am owed by the company.
Generally I take wait until I'm £5k on the DLC and take a £10k dividend then work that £10k off until I'm another £5k "overdrawn".
Keeps me within the £5k DLC "limit" and means I get to use nice round numbers on my tax return. £30k of divs, £7 ish K of salary so very little higher rate tax paid. Doesn't mean I've worked out what to do with the nest egg I'm accumilating but I'll worry about that later.
Leave a comment:
-
Yes, but why? Why not just declare the amount you're making as a loan as a dividend in the first place?
Leave a comment:
-
Sounds fine to me, a running loan account consists of money paid to director less any repaid or due to him for whatever reason, divis, salary or valid personal expenses.
There may be tax or disclosure requirements for loans depending on amount and when paid back but that's a separate issue.
Leave a comment:
-
Does Director Loan Account and Dividends go hand in hand?
Couple of quick questions:
1. If the business account have distributable profits of 10000 pounds, and has paid director 10000 pounds as director loan. Since company does not have any more money in the account now, can it declare dividends of 10000 pounds to clear off the director loan?
2. Can we maintain a director loan account that works like this:
Withdrawn 1000 pounds: 01-Jan-2012 : Balance: +1000
Withdrawn 2000 pounds: 01-Feb-2012 : Balance: +3000
Declared 1500 pounds dividend: 01-Mar-2012 : Balance: +1500
And.. Can it continue like this: where all the withdrawals go into Director Loan account and when there are dividends, it gets cleared or reduced?
My accountant told me this is fine but I started doubting what he does now because of some of things he told me or done with my accounts?Tags: None
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Leave a comment: