New to Contracting

[Snarf]

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks

I'd suggest the best option is ask your accountant, as you've found from the responses above you won't get a consensus on here when asking things like this...

[Sausage Surprise]

I liked the title of your edit. I have a friend - an ardent feminist! I recommended my house buying solicitor to her. She asked his name. I took huge delight in saying it was a woman - and not to be so sexist!

My accountant recommends it as he is worried that HMRC might say the a dividend more than once a quarter is salary. I have no idea if there is any backing for this. But I try to keep as far away from HMRC as I can.

Errr...no...it's a dividend and not salary. The clue is in the name and the paperwork that goes with it.

[BrilloPad]

presumably just to make their life easier?

I liked the title of your edit. I have a friend - an ardent feminist! I recommended my house buying solicitor to her. She asked his name. I took huge delight in saying it was a woman - and not to be so sexist!

My accountant recommends it as he is worried that HMRC might say the a dividend more than once a quarter is salary. I have no idea if there is any backing for this. But I try to keep as far away from HMRC as I can.

[pr1]

True. However my accountant recommends no more than 4 a year. And prefers 2 or 1 a year.

presumably just to make their life easier?

[mudskipper]

NorthernladUK Comment generator

[BrilloPad]

You can take a divvie as often as you want (subject to money being available), there's nothing in statute (yet!) about only taking it 4, 6 or 12 times a year etc.

True. However my accountant recommends no more than 4 a year. And prefers 2 or 1 a year.

[BolshieBastard]

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks

You can transfer money from your co to your personal account anytime but there are ramifications. Obviously, there needs to be sufficient money for the company to meet its obligations such as money accountancy fees, VAT payments and end of year corp tax.

Some people go over the top here () about divvies and the like. Just keep a record of money over and above your 'wage' you take from the company. Your accountant should sort out the legalese at year end providing you keep records of money taken as 'divvies.'

You can take a divvie as often as you want (subject to money being available), there's nothing in statute (yet!) about only taking it 4, 6 or 12 times a year etc.

[unixman]

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

No. That would be stealing. A company is a legal entity capable of owning things. Your company owns the money in it just like you own your PC. The solution would be to pay yourself a dividend. Speak to your accountant.

[TheFaQQer]

What shareholding do you have in your limited company? Are you a 100% shareholder? Is your contract inside or outside IR35?

Those are the important questions that you need answering before you can do anything else, really.

Possible actions:

1) Take a director's loan and then repay it when you can - this could get complicated, so talk to your accountant

2) Take a dividend, subject to you being outside IR35 and being the sole shareholder. If you aren't the sole shareholder, you'll need to pay that out in proportion to the holdings. And only from profit. So talk to your accountant

3) Pay a bonus which is subject to NI and PAYE. You'll need to include this in your payroll run, so talk to your accountant or whoever does your payroll.

And welcome

[northernladuk]

There is a solid line between the company money and your money. They are completely different and any movement between the two must be done properly. You can not just transfer some money over.

Please spend more time talking to your accountant and understand your situation.

[stek]

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks

Your accountant will issue you a dividend voucher and draw up the meeting agenda for you surely?

Assuming you have enough money accrued to pay Corporation Tax etc....

[BrilloPad]

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks

Welcome to CUK! Hopefully your enquiry will be treated as if its in the welcome section! If not, maybe a kind mod can move it over?

What shareholding do you have in your limited company? Are you a 100% shareholder? Is your contract inside or outside IR35?

[Harry Lime]

Hi all,

I've recently started contracting and have a couple of questions i'd really appreciate your thoughts on. I know these things are very rarely black and white but any advice would be much appreciated.

I've set up a ltd company and now have a decent amount of money in my Business Account. I chose to pay myself a salary similar to what I was previous on in permanent employment, however i'm short of cash this month. The way the business is set up, I can pay myself a dividend but i'm not sure how to go about this yet.

So my question is, can I just transfer some money over from my business account to my personal account as a one-off payment without any ramifications?

Thanks