Reply to: Dividend frequency

[NotAllThere]

You're not alone. I remember them too. But can't find any evidence. Probably in some back issue of Freelance Informer. I suppose we could always ask Roger Sinclair.

[malvolio]

I'm unaware of those cases. Do you have a link or can you remember where you read about them?

Hello again. Had a hunt but couldn't track down specific references, which puts them over 10 years back... so probably not too reliable!

[dude69]

I pay as much as possible to take me (and wife) up to higher rate band on April 6th. If there's any remaining basic rate allowance, I will fill it up as soon as possible, or just before the end of the year.

No more than two per year.

[ratewhore]

Be clear as to whether you are talking about paying a dividend or declaring a dividend...

[beeker]

I did some entertaining of potential clients whilst there... won me some business and a personal reference to another potential client!

Entirely worthwhile even if we did get gubbed!

[moorfield]

Quarterly, however on the odd occasion I have needed to make a big purchase I have paid extra dividend. Like my football team qualifying for UEFA Cup group stages and being drawn against Bayern Munich and Atletico Madrid - away!

Saying "oh i can't afford to go as I can't take dividend for another two months yet" just wouldn't have cut it....

You mean you didn't try to expense these? That sounds like two client interviews in Munich and Madrid to me.

[beeker]

Quarterly, however on the odd occasion I have needed to make a big purchase I have paid extra dividend. Like my football team qualifying for UEFA Cup group stages and being drawn against Bayern Munich and Atletico Madrid - away!

Saying "oh i can't afford to go as I can't take dividend for another two months yet" just wouldn't have cut it....

[al_cam]

Other: I wait until current assets - liabilities - 3 months predicted business costs > £10K, then I pay the £10K in dividends.

That way I can deal with any time on the bench and still pay myself and any expenses and I hope that Hector wouldn't see it as disguised salary as it works out to be irregular and not time based.

[gadgetman]

I'd love to be able to do that but a large mortgage and school fees mean it isn't feasible

Have you ever considered leaving the surplus over the higher of:-

• the amount taking you up to the higher rate tax threshold (say £2,650 pcm divi assuming you take a salary of £5,435 pa)
  
• the amount you personally need to live on

in the company with a view potentially one day to getting it out at 0/10% tax instead of 25%?

[THEPUMA]

I don't think there was any mention of a 'fixed' dividend.

Personally I pay a monthly dividend based on what is left after my outgoings for the month plus all of my tax liabilities.

Have you ever considered leaving the surplus over the higher of:-

• the amount taking you up to the higher rate tax threshold (say £2,650 pcm divi assuming you take a salary of £5,435 pa)
  
• the amount you personally need to live on

in the company with a view potentially one day to getting it out at 0/10% tax instead of 25%?

[gadgetman]

I don't think there was any mention of a 'fixed' dividend.

Personally I pay a monthly dividend based on what is left after my outgoings for the month plus all of my tax liabilities.

Not really an urban myth, there is an underlying logic. If you always pay a fixed dividend every other month regardless of income, or indulge in any other routine payment habit, then just perhaps Hector has a point.

As with all things, the application of a bit of intelligence usually works wonders...

[THEPUMA]

Thanks

[malvolio]

I'm unaware of those cases. Do you have a link or can you remember where you read about them?

Long time ago - 7/8 years perhaps? I'll have a hunt through my archive this evening.

[VectraMan]

As and when I feel like it. Last year I went without for 4 months, then paid a large dividend on April 6th.

[THEPUMA]

Quite right, of course. I ws thinking of a couple of cases where the divi was re-classified as income by Hector, but both were in the course of a wider investigation. As you say, Hector only normally sees an annual statement

I'm unaware of those cases. Do you have a link or can you remember where you read about them?