Reply to: How often do you take off dividends

[d000hg]

Yeah, we have a mortgage with Santander and I think the cashback on that alone covers the fee.

[TheFaQQer]

O/T Have you seen the changes to the Santander 123 accounts? They have upped the fee's

Yes, but as long as you have enough money (£9000 as a basic rate tax payer, £8600 from April) then it's the best account to have for the interest alone. My joint account gets more than £5 a month back in cashback every month before the interest charges.

Martin Lewis says that as long as you have some cashback and at least £5k then it's probably the best to have still.

I'm considering opening a third one in the new tax year as well.

[SimonMac]

Some people have suggested that it might look like salary, but as long as the paperwork is correct and there is profit to cover it then you should be fine.

When I pay mine I have a different payment reference, I have the paperwork (voucher and meeting minutes), and I know there is plenty of retained profit so even if I moved to monthly dividends then I wouldn't worry about it.

I used to have an offset mortgage so at the start of the tax year I'd take a big dividend and whack it in there to reduce the interest bill. Now that I don't have the mortgage, I whack a lump sum into my different Santander 123 accounts and get some interest that way.

O/T Have you seen the changes to the Santander 123 accounts? They have upped the fee's

[Unix]

I do it as and when which ends up being monthly or more. But next year I might move to quarterly then annually after a few years.

[The Spartan]

I generally issue them Ad-hoc but hopefully I'll move to twice yearly in the new financial year.

[TheFaQQer]

Cheers everyone, I have always avoided monthly dividends as I thought it looked dodgy, was surprised to see a quarter of people do this.

I started Ad-hoc and moved to twice yearly

Some people have suggested that it might look like salary, but as long as the paperwork is correct and there is profit to cover it then you should be fine.

When I pay mine I have a different payment reference, I have the paperwork (voucher and meeting minutes), and I know there is plenty of retained profit so even if I moved to monthly dividends then I wouldn't worry about it.

I used to have an offset mortgage so at the start of the tax year I'd take a big dividend and whack it in there to reduce the interest bill. Now that I don't have the mortgage, I whack a lump sum into my different Santander 123 accounts and get some interest that way.

[d000hg]

Ah, it's just your phrasing "You don't declare a dividend if the company is [using ALL profits] making employer contributions to the pension plan" seemed quite a strong statement. In the context being discussed, fine, just checking!

[SimonMac]

Cheers everyone, I have always avoided monthly dividends as I thought it looked dodgy, was surprised to see a quarter of people do this.

I started Ad-hoc and moved to twice yearly

[TheFaQQer]

Right... but surely in post cases a company would make some pension contribution and still issue dividends, rather than plough all 'profit' into the pension.

Well, let's go back to what was originally said:

Where's the "Never, MyCo puts it into my pension" option?

Adhoc... you just never need them.

The first quote implies that in that situation, the company never pays a dividend - I'm deducing this from their use of the word "never".

Your post then talks about declaring adhoc dividends - which isn't the case if the company never makes a dividend, as implied by the post that you were answering.

[d000hg]

Right... but surely in post cases a company would make some pension contribution and still issue dividends, rather than plough all 'profit' into the pension.

[TheFaQQer]

Why?

Because it's not a dividend.

Dividends are paid to the shareholders in proportion of the number of shares that they own, and must be paid from profit. Employer pension contributions are a cost to the business and reduce the amount of profit available to pay dividends.

[d000hg]

You don't declare a dividend if the company is making employer contributions to the pension plan.

Why?

[Contreras]

The same round-sum amount, 2-4 times per year, effectively ad-hoc but based on the company's ability to pay rather than when I need it.

I.e. whenever retained profit exceeds a threshold.

[EternalOptimist]

The dividend tax will hit me for about 2k a year

so I take out all my cash up to 2k income tax just before April 2016.


then if I need to bail out of my limited, its all a lot smoother

[AtW]

Every hour.

HTH

sasguru