Expenses V dividend

[DaveP]

I'm unsure about something regarding my monthly payroll, which I hope you may be able to explain.

If my monthly expenses came to £100 for example, and I claimed those expenses would that mean the monthly dividend would be £100 less.

If I didn't claim the £100 expenses, would that mean my dividend would be £100 more.

The reason I ask, is because I am considering not claiming expenses, to reduce admin, & simplify the payroll process & maximize the monthly dividend.

Would this effect my corporation tax and/or anything else ??

[northernladuk]

Get an accountant and ask them. Seriously if you can't work this out I hate to think whatelse you are missing/getting wrong. I think a good accountant like the ones that post here are actually going to make you money!

Or are you just spamming your 'opportunity of a lifetime' sig?

[DaveP]

Get an accountant and ask them. Seriously if you can't work this out I hate to think whatelse you are missing/getting wrong. I think a good accountant like the ones that post here are actually going to make you money!

Or are you just spamming your 'opportunity of a lifetime' sig?

And the answer is ............?

[northernladuk]

And the answer is ............?

It's got to be the sig option. No one would seriosuly ask a question like this.

[administrator]

I'm unsure about something regarding my monthly payroll, which I hope you may be able to explain.

If my monthly expenses came to £100 for example, and I claimed those expenses would that mean the monthly dividend would be £100 less.

If I didn't claim the £100 expenses, would that mean my dividend would be £100 more.

The reason I ask, is because I am considering not claiming expenses, to reduce admin, & simplify the payroll process & maximize the monthly dividend.

Would this effect my corporation tax and/or anything else ??

Hi Dave,

I do agree that your signature is not appropriate and have therefore removed it so please don't put it back in. Don't mind people adding personal sites but this one is out of character for the site and I would prefer not to link to if from here.

In terms of your question, expenses come out of company profits before corp tax so you will pay more in corp tax by not claiming expenses. So up to you whether the expenses amount to enough to make not claiming them worthwhile over the admin time.

[Martin at NixonWilliams]

I'm unsure about something regarding my monthly payroll, which I hope you may be able to explain.

If my monthly expenses came to £100 for example, and I claimed those expenses would that mean the monthly dividend would be £100 less.

If I didn't claim the £100 expenses, would that mean my dividend would be £100 more.

The reason I ask, is because I am considering not claiming expenses, to reduce admin, & simplify the payroll process & maximize the monthly dividend.

Would this effect my corporation tax and/or anything else ??

Hi DaveP,

There are two important things to consider here.

One is the effect on your profit, a £100 expense will reduce the company's profit by £80 (assuming it is tax deductible) as 20% relief will be given, whereas a dividend of £100 will reduce the profit by £100.

The second thing to consider is that the reimbursement of employment expenses will not utilise any of your tax allowances whereas the dividend would. If you are a higher rate taxpayer the £100 dividend would be taxable at an effective rate of 25%.

I hope this helps.

Martin

[Notascooby]

Surely with a join date of 2006 and 161 posts this is a wind-up?

I personally think NLUK was too soft on him, professional forum or not.

[northernladuk]

Surely with a join date of 2006 and 161 posts this is a wind-up?

I personally think NLUK was too soft on him, professional forum or not.

OMG, I get a bollocking for being to harsh and now I get a bollocking for being too soft

[d000hg]

Hi Dave,

I do agree that your signature is not appropriate and have therefore removed it

I missed it, I want the opportunity of a lifetime!

[mudskipper]

I missed it, I want the opportunity of a lifetime!

Google cache is your friend.
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