Hi all, I need some advice on how best to deal with salary+dividends before April 6th. My situation is as follows: I recently started my Ltd having not previously worked this tax year. I have not yet paid out any salary or dividends. I now have profit of around 13k. I expect to earn over higher rate threshold next tax year.
Can I pay myself the 13 k profit as a dividend (after CT), then after this, declare a salary payment of £10600 as payment to directors loan account (despite no longer having the available funds)?
This would incur more immediate tax than just paying 10k salary + 3k dividends but would have the benefit of effectively shifting some of next years income into this year.
My accountant says this is not allowed as it would 'create negative reserves'. However, I have come here to consult the hive mind for a second opinion as I can't find any info on the web for this situation and don't have 100% faith in their answer.
Can I pay myself the 13 k profit as a dividend (after CT), then after this, declare a salary payment of £10600 as payment to directors loan account (despite no longer having the available funds)?
This would incur more immediate tax than just paying 10k salary + 3k dividends but would have the benefit of effectively shifting some of next years income into this year.
My accountant says this is not allowed as it would 'create negative reserves'. However, I have come here to consult the hive mind for a second opinion as I can't find any info on the web for this situation and don't have 100% faith in their answer.
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