Company tax change and calculation of dividends

[liley]

Hi,
Great forum. Just discovered few weeks ago.

I am just doing paperwork for dividends (yeah, I know I should've done it months ago but I am just back to company as secretary and book-keeper).
I am doing calculations on distributable profits for interim dividends paid. As until 31 march 2006 profits up to 0-10k are under 0% tax, then I don't need to worry about money left on business account to pay tax unless the profit exceed 10k, right? I am quite confused, when reading that I should keep 19% as a reserve to pay CT always, when doing calculations. Or if our company year will finish on 30th June 2006, then whole profits will be taxed on 19%? But the 19% was introduced recently, then how could I knew it e.g in September, when paying dividend on 3k profit?
This is quite esential information I need, when registering withdrawals from business account.

[Viktor]

You should have a look at:

http://www.hmrc.gov.uk/ctsa/mrr_worksheet.htm

I think the examples here are in fact what you are looking for...

[liley]

Thank you It made me clear now and I can see, that the new rules are not good for those who made a bigger profit in first part of FY (until 31 march 2006) and smaller in the second part of FY. The other way round is OK. As whole profit of AP will be splitted proportionally among these two FYs.

[Fleetwood]

As whole profit of AP will be splitted proportionally among these two FYs

split

[ASB]

I guess it's the sums with the NCDR you are struggling with.

Since the 0% starting rate is removed from 1/4/06....

I was just wondering if you are sure you paid a dividend in the previous FY. Are you sure it wasn't a loan that you are going to repay in time to avoid the advance charge and then pay a dividend after the 1/4/06 when your marginal CT rate won't increase due to the NCDR.

If your profit was above 50k in the accounting periods it makes no difference.

[liley]

to Zetghost

very funny...
..English is not my first language but I am glad you have some joy today

[xoggoth]

You are new here aren't you? Fleetwood is the spelling/grammar fuhrer, he corrects everybody. As for Zeitghost, no known terrestrial language is his first.

PS Had forgotten all about it. Cheers for reminding me, just in time to declare a divi and make an internet transfer before 1st April.

[liley]

Yeah...I did enjoy... Only one month left - will finish on Monday.

One more question:

There were few withdrawals every month (small amounths - personal expenses). Sometimes in the distance of 2-3 days. Can I make just one voucher and one minutes up front e.g. every month and this would cover all withdrawals that particular month? I have read somewhere here that IR doesn't like to see too many vouchers, but at the other hand vouchers and minutes have to be prepared every time dividend is paid... What do you think about this?

[ASB]

Yeah...I did enjoy... Only one month left - will finish on Monday.

One more question:

There were few withdrawals every month (small amounths - personal expenses). Sometimes in the distance of 2-3 days. Can I make just one voucher and one minutes up front e.g. every month and this would cover all withdrawals that particular month? I have read somewhere here that IR doesn't like to see too many vouchers, but at the other hand vouchers and minutes have to be prepared every time dividend is paid... What do you think about this?

Post the number to the directors current account. Declare dividends quarterly to ensure it's covered.

[XLMonkey]

Yeah...I did enjoy... Only one month left - will finish on Monday.

One more question:

There were few withdrawals every month (small amounths - personal expenses). Sometimes in the distance of 2-3 days. Can I make just one voucher and one minutes up front e.g. every month and this would cover all withdrawals that particular month? I have read somewhere here that IR doesn't like to see too many vouchers, but at the other hand vouchers and minutes have to be prepared every time dividend is paid... What do you think about this?

You can prepare one voucher and pay the dividend in as many instalments as you want. E.g. you can declare a dividend of 10,000 and leave it in the company account, and withdraw it in instalments of 2,000 each. All that matters is that the company has the money, and that you have a voucher to cover at least the total withdrawn.