Mistakenly entered net wages instead of dividends in payment reference Mistakenly entered net wages instead of dividends in payment reference
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  1. #1

    Nervous Newbie


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    Default Mistakenly entered net wages instead of dividends in payment reference

    Hello, I recently transferred dividends from my business account to my personal account and by default 'Net Wages' is pre-filled (from last transaction) in the payment reference fields. I made the mistake of not changing this to 'Dividends'. The bank said they cannot change the reference line and that the payment has already gone through. Has anyone done this before? Is there anyway I can rectify this and if not, what are the implications?

    Thank you.

  2. #2

    Prof Cunning @ Oxford Uni

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    It's not that major an issue, but if HMRC come after you they may ask for some explaining. Of course, if it's clearly a different number, e.g. your salary is normally £680 a month and your dividends are £3,750, then the mistake is easier to explain.

    To make things easier, what you can do is set up multiple standing orders, with different transaction descriptions, so one would be for "Salary" and another for "Dividends", set them to go out on a particular day each month and then all you need to do is make sure you have the money in your business account to cover them.
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  3. #3

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    1. Did you report it as wages to HMRC?
    2. Do you have minutes of a board meeting approving the dividend?
    3. Does your accountant have minutes of that board meeting to prove that it has happened? If you send the minutes regularly, so he has them on record, it shows that your dividends are intended to be dividends, not wages, and can save you a lot of trouble later.
    4. Do you have a dividend voucher showing it as a dividend?

    If the answers are no, yes, yes, and yes, forget about it. If any of questions 2-4 are answered no, rectify that, move on, but make sure in future the answer to those will always be yes when you make a dividend payment.

  4. #4

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    As noted above, nothing to worry about really. But technically what you can do is make a payment from your account to your company account reversing the original payment, with the reference 'Repayment net wages'. Then make the payment with the correct reference.

    What matters (along with the requisite documentation) is where the entry is made in your books - bank statements are only supporting evidence.
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  5. #5

    Contractor Among Contractors


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    Agree with the above.

    It's not really any different to using the wrong payment when paying a supplier. Ensure they know what it really is and it's allocated correctly, and no harm done.

  6. #6

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    Why did you need to fill that field in? Doesn't your bank have set payments that you can just use again? I have one for expenses, pay and Dividends. All go to the same account but have split them up to be clear. All I do is pick the one option I want to use and select pay now. Don't have to enter anything in to fields?

    Why don't you use standing order for pay so don't need to fill it in?

    Something doesn't smell right here. Do you use and accountant as well?
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  7. #7

    Prof Cunning @ Oxford Uni

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    Quote Originally Posted by northernladuk View Post
    Why did you need to fill that field in? Doesn't your bank have set payments that you can just use again? I have one for expenses, pay and Dividends. All go to the same account but have split them up to be clear. All I do is pick the one option I want to use and select pay now. Don't have to enter anything in to fields?

    Why don't you use standing order for pay so don't need to fill it in?

    Something doesn't smell right here. Do you use and accountant as well?
    If the OP isn't using standing orders to make the payment, their bank may prevent them from having more than one payment description per payee.
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  8. #8

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    Quote Originally Posted by WTFH View Post
    If the OP isn't using standing orders to make the payment, their bank may prevent them from having more than one payment description per payee.
    But he can change it manually? Seems a bit of a poor system if that's the case.
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  9. #9

    Faqqed Off

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    Quote Originally Posted by WTFH View Post
    If the OP isn't using standing orders to make the payment, their bank may prevent them from having more than one payment description per payee.
    Or if you're using a mobile device, some banks truncate the display name when picking from the list of payments.
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  10. #10

    More time posting than coding


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    Quote Originally Posted by northernladuk View Post

    Something doesn't smell right here. Do you use and accountant as well?
    Talk about an over-reaction!

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