back dated salary, Bonus or Dividend

[Yaso87]

Hi

I started my business a few months ago but only started making money this month. Should I back date my salary or take it as bonus or dividends as the year end is approaching.

I can't ask my accountant as I don't have one yet.

[mudskipper]

Hi

I started my business a few months ago but only started making money this month. Should I back date my salary or take it as bonus or dividends as the year end is approaching.

I can't ask my accountant as I don't have one yet.

You can only take dividends from profit. Whether it is better for you to take salary or dividends depends very much on your individual circumstances and IR35 status. What do you mean by a 'bonus'? You need an accountant, who will be able to advise you based on your situation - it's a false economy not to have one.

[northernladuk]

I can't ask my accountant as I don't have one yet.

Get one then. Carrying on like this is going to cost you a lot of money otherwise. As a directory you have a legal responsibility to run your finances properly. This is not the way to do it.

[Yaso87]

You can only take dividends from profit. Whether it is better for you to take salary or dividends depends very much on your individual circumstances and IR35 status. What do you mean by a 'bonus'? You need an accountant, who will be able to advise you based on your situation - it's a false economy not to have one.

Thanks for your prompt response.

Yeah I have basic understanding of accounting, as I had a few accounting modules at uni.
Due to the nature of my business I have very few basic expenses the rest is profit.

If I am unable to back date my salary I thought its best to take a bonus from the profit since I haven't used up my allowance yet and there is only just over a month left before the new financial year.


Basically I have 12K coming in on Monday and its the first real income I have received and I wanted it to know what is the most tax efficient way of paying myself the 12k before the new FY.

On average how much would it cost to hire an accountant in london.

[northernladuk]

Thanks for your prompt response.

Yeah I have basic understanding of accounting, as I had a few accounting modules at uni.
Due to the nature of my business I have very few basic expenses the rest is profit.

If I am unable to back date my salary I thought its best to take a bonus from the profit since I haven't used up my allowance yet and there is only just over a month left before the new financial year.


Basically I have 12K coming in on Monday and its the first real income I have received and I wanted it to know what is the most tax efficient way of paying myself the 12k before the new FY.

On average how much would it cost to hire an accountant in london.

You don't need an accountant in London. Many of us have never met our accountants and I've never needed a face to face in 8 years. Gonfor a contractor specialist that uses freeagent or a similar portal. Gorilla Accounting, Intouch or many of people that post in here SJD is one of the biggest but their charges went up. Expect to pay anything from about 65 quid a month upwards but anything over 100 is pushing too much.

You main focus is a warchest in case your gig folds. Pay yourself the absolute minimum you can for awhile and don't forget considernthe taxes you owe when looking at the distributable amount.

[Alan @ BroomeAffinity]

On average how much would it cost to hire an accountant in london.

£100 PCM give or take. They'll dave you more than your annual fee on the advice they provide with just this one question I'd guess.

And location is irrelevant. Most of us have clients all over uk. I have clients in Cornwall, the Shetlands, Northern Ireland, Wales and they all receive the same service as the clients down the road from me.

[Yaso87]

You don't need an accountant in London. Many of us have never met our accountants and I've never needed a face to face in 8 years. Gonfor a contractor specialist that uses freeagent or a similar portal. Gorilla Accounting, Intouch or many of people that post in here SJD is one of the biggest but their charges went up. Expect to pay anything from about 65 quid a month upwards but anything over 100 is pushing too much.

You main focus is a warchest in case your gig folds. Pay yourself the absolute minimum you can for awhile and don't forget considernthe taxes you owe when looking at the distributable amount.

Thanks for the accountant recommendations.

from my understanding I can take home up to 40K tax free if I pay myself a small salary and the rest in dividends. the difficulty I am facing is I have only made money at the end of the year and would like to take out all the money I earned not to pay any cooperation tax, as any money remaining is profit.

The second issue I am facing is that at the very beginning of the next financial year I will have to renew my FCA license and HMRC license and if I take out all the money I will need to lend the money back to the company in order to pay for it.

[Alan @ BroomeAffinity]

You're missing some key knowledge. Get an accountant ASAP. Monday.

You still pay coRporation tax regardless of dividends paid. Salary will attract tax and nic.

[Alan @ BroomeAffinity]

What's your HMRC licence incidentally?

[Yaso87]

What's your HMRC licence incidentally?

AML