Amount of dividend versus profits

[Lance]

Possibly because in a previous thread he said he didn't need an accountant and he could do it all himself.

Hence my post about making sure there's still money in the pot. I fear he doesn't understand the difference between income and profit.

I would say that 98% of the people on this fiorum know that, and 99% of those have an accountant anyway.

[GezHells]

Ohh it's that guy. Christ.. he can't even work this one out? I have a feeling we are going to be seeing a hell of a lot of this poster

Haha, yes it's that guy

Why would I need an accountant when I've got you lot on this forum, eh?!

Being serious - yes I do get it. Well, the basics anyway. I've stopped paying myself the usual salary as I haven't been earning recently, and didn't want to have to submit my accounts with a loss (because that would have been more complex than I wanted, as I'm doing it myself).

And I haven't got an accountant because my last one was just useless and caused me all sorts of stress and problems - so I just decided to learn how to do it myself for the time being. I figure that my situation is incredibly simple, and if I keep it that way, then all should be good.

[LondonManc]

Haha, yes it's that guy

Why would I need an accountant when I've got you lot on this forum, eh?!

Being serious - yes I do get it. Well, the basics anyway. I've stopped paying myself the usual salary as I haven't been earning recently, and didn't want to have to submit my accounts with a loss (because that would have been more complex than I wanted, as I'm doing it myself).

And I haven't got an accountant because my last one was just useless and caused me all sorts of stress and problems - so I just decided to learn how to do it myself for the time being. I figure that my situation is incredibly simple, and if I keep it that way, then all should be good.

Salary and revenue are unrelated.

Your monthly salary is better continuing because it's a salary and is straight out of company funds, not company profit.

50k cash in bank at start of year.
10k contract then canned
12.5k salary drawn across the year is still fine - you have enough in the company to pay it and it's the most tax efficient way of getting your cash out of the company, assuming the standard 1250L tax code applies.

A company operates on anyone bringing revenue into it; you're still thinking like a permie.

[northernladuk]

I figure that my situation is incredibly simple, and if I keep it that way, then all should be good.

Famous last words....

[GezHells]

Salary and revenue are unrelated.

Your monthly salary is better continuing because it's a salary and is straight out of company funds, not company profit.

50k cash in bank at start of year.
10k contract then canned
12.5k salary drawn across the year is still fine - you have enough in the company to pay it and it's the most tax efficient way of getting your cash out of the company, assuming the standard 1250L tax code applies.

A company operates on anyone bringing revenue into it; you're still thinking like a permie.

What about when I file my accounts? That seems to operate on a simple profit and loss principle... if my outgoings (i.e. my salary) is greater than my earnings for the year, then it records a loss. Which, I assume, makes the accounting more complex, and hence I'm trying to avoid.

[WTFH]

What about when I file my accounts? That seems to operate on a simple profit and loss principle... if my outgoings (i.e. my salary) is greater than my earnings for the year, then it records a loss. Which, I assume, makes the accounting more complex, and hence I'm trying to avoid.

And how much money have you got in your company bank account?

[Paralytic]

What about when I file my accounts? That seems to operate on a simple profit and loss principle... if my outgoings (i.e. my salary) is greater than my earnings for the year, then it records a loss. Which, I assume, makes the accounting more complex, and hence I'm trying to avoid.

Really, this is very basic accounting stuff. If its beyond you, get an accountant - they'll most likely save you more in tax (CT and more efficient use of your personal tax allowances) than you're spending on them.

[LondonManc]

What about when I file my accounts? That seems to operate on a simple profit and loss principle... if my outgoings (i.e. my salary) is greater than my earnings for the year, then it records a loss. Which, I assume, makes the accounting more complex, and hence I'm trying to avoid.

You can take out more salary and record a loss for the year. Not sure why you'd look at taking a 4k salary and 6k divis from a 10k revenue when you could take 12.5k salary and stand the loss from retained profit from earlier years.

[Lance]

You can take out more salary and record a loss for the year. Not sure why you'd look at taking a 4k salary and 6k divis from a 10k revenue when you could take 12.5k salary and stand the loss from retained profit from earlier years.

back of a fag packet says that this mistake has cost £1,200... Which is around the same, tending on just a bit higher, than an accountant would cost........ Oddly enough.....

[LondonManc]

back of a fag packet says that this mistake has cost £1,200... Which is around the same, tending on just a bit higher, than an accountant would cost........ Oddly enough.....

I always felt that it was in my company's best interest to engage an accountant, just because they're paid to minimise my tax bill in ways that I'm not aware of and shouldn't care about so long as it's legal.