30 day payment terms, take dividend before cash payment?

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!

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.

Scrag Meister replied

7 July 2011, 10:45
Originally posted by GregCapitalCity View Post

Just be careful with this. I am sure you will be fine, but in the event your client decides not to pay then you will get yourself in a spot of bother! If there is any doubt, go down the loan route. It can be over £5k and not incur any loan interest so long as the the loan, and then loan repayment transactions, are completed between the 6th of one month, and the 5th of the next month.

WGCCS

IMHO it pays to have the cash in your bank before spending it.
Leave a comment:
Greg@CapitalCity replied

7 July 2011, 08:51
Payment

Just be careful with this. I am sure you will be fine, but in the event your client decides not to pay then you will get yourself in a spot of bother! If there is any doubt, go down the loan route. It can be over £5k and not incur any loan interest so long as the the loan, and then loan repayment transactions, are completed between the 6th of one month, and the 5th of the next month.
Leave a comment:
Sockpuppet replied

7 July 2011, 08:45
As long as there is profit in the company you can take the dividend, you can do this before the cash lands. Best idea might be to lend yourself <£5k from the company until the payment lands then do a div to clear the directors loan account.
Leave a comment:
Wanderer replied

7 July 2011, 08:15
Originally posted by nfoote View Post

B) I can take a dividend now (assuming there is cash in the company account reserved for other things like tax) even though the cash from the invoice won't land in the company accounts for a few weeks (thus covering the tax responsibility again )?

According to the PCG you can go right ahead and pay a dividend as soon as the invoice has been raised.
Leave a comment:
nfoote started a topic 30 day payment terms, take dividend before cash payment?

7 July 2011, 07:54
30 day payment terms, take dividend before cash payment?

Real quick question;

Invoice raised and sent to customer on 30th of June.
30 day payment terms so payment due on 30th July.
Current date, 7th July.

FreeAgent reports I have distributable funds now (7th July) so does that mean;
A) the company "earned" the money as soon as you raise the invoice?
B) I can take a dividend now (assuming there is cash in the company account reserved for other things like tax) even though the cash from the invoice won't land in the company accounts for a few weeks (thus covering the tax responsibility again )?
Tags: None