Advice needed. First contract after earning > 15K this year.

[PJ03029174]

I've just started my first contract and have worked the first 5 months of this financial year as a permie. I've grossed 15k and have paid Tax & NI on this amount. I'm currently looking at how much salary to draw out for the remainder of this financial year and am investigating the option of just paying monthly dividends for the rest of the year (as recommended by my accountant). I was hoping to get some opinions on this as its my first contract and although i've had my contract checked for IR35, i don't want to draw attention to myself. I've worked with contractors in my previous job and they've all said monthly dividends are a big no no and both paid over the minimum salary amount to stay under the radar. What do you guys think? Am i being paranoid and should listen to my highly paid accountant? I'd really appreciate some advice, thanks

[SpontaneousOrder]

I've just started my first contract and have worked the first 5 months of this financial year as a permie. I've grossed 15k and have paid Tax & NI on this amount. I'm currently looking at how much salary to draw out for the remainder of this financial year and am investigating the option of just paying monthly dividends for the rest of the year (as recommended by my accountant). I was hoping to get some opinions on this as its my first contract and although i've had my contract checked for IR35, i don't want to draw attention to myself. I've worked with contractors in my previous job and they've all said monthly dividends are a big no no and both paid over the minimum salary amount to stay under the radar. What do you guys think? Am i being paranoid and should listen to my highly paid accountant? I'd really appreciate some advice, thanks

Given that dividends are paid from profits, it seems a bit presumptuous, and very much like salary payments to me, to take dividends monthly.

[Jessica@WhiteFieldTax]

1000 or so contractors on my books over the years, I've never known monthly dividends to be a problem. Some even went weekly dividends, although I'm nervous with that.

[northernladuk]

Listen to your accountant. If you don't trust him get another one you do IMO.

And also read all the guides to the right if you are unsure.

Oh yeah and don't listen to other contractors. There are some right idiots out there.

[northernladuk]

Funny the FLC proposal mention regular dividends.

[JB3000]

1000 or so contractors on my books over the years, I've never known monthly dividends to be a problem. Some even went weekly dividends, although I'm nervous with that.

+1

The main things are that you are outside of IR35, have enough after tax profit (i.e. leave enough in your bank to pay your vat and corp tax) and complete a dividend voucher.

[JB3000]

I've just started my first contract and have worked the first 5 months of this financial year as a permie. I've grossed 15k and have paid Tax & NI on this amount. I'm currently looking at how much salary to draw out for the remainder of this financial year and am investigating the option of just paying monthly dividends for the rest of the year (as recommended by my accountant). I was hoping to get some opinions on this as its my first contract and although i've had my contract checked for IR35, i don't want to draw attention to myself. I've worked with contractors in my previous job and they've all said monthly dividends are a big no no and both paid over the minimum salary amount to stay under the radar. What do you guys think? Am i being paranoid and should listen to my highly paid accountant? I'd really appreciate some advice, thanks

Assuming you are outside of IR35 and have no other personal income you can take out circa £24k in dividends tax free.

[PJ03029174]

Thanks to everyone for taking the time to comment
I will go with what the accountant advises.