Rich/Tight contractors? Rich/Tight contractors?
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  1. #1

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    amanwhoisquiet is good enough for Jehovah!


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    Default Rich/Tight contractors?

    I've yet to take any dividends at all this year, and have only taken minimum salary.
    I've seen this mentioned in a post today and I don't want to hijack the thread to ask this question but how does someone make this work? I've seen it mentioned on the site before with regard to pensions (putting all ir35 contract earnings into a pension for example). I get that some of the guys on here have been doing it for years and might have a substantial pers acct warchest, but what's even the point of this? Isn't it just good sense to draw divis up to the top of the basic rates?

    What am I missing?

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    Quote Originally Posted by amanwhoisquiet View Post
    I've seen this mentioned in a post today and I don't want to hijack the thread to ask this question but how does someone make this work? I've seen it mentioned on the site before with regard to pensions (putting all ir35 contract earnings into a pension for example). I get that some of the guys on here have been doing it for years and might have a substantial pers acct warchest, but what's even the point of this? Isn't it just good sense to draw divis up to the top of the basic rates?

    What am I missing?
    I guess the key is in the word "yet"?

    I haven't yet taken dividends this last Co year, as I'm still "living" on divs paid to the max amount last Co year.

  3. #3

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    That would explain it I suppose. I'm still in year 1 so I'm still a bit hand to mouth (not quite that severe).

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    Quote Originally Posted by amanwhoisquiet View Post
    That would explain it I suppose. I'm still in year 1 so I'm still a bit hand to mouth (not quite that severe).
    Quite often the case when you start.

    I will only be taking one singular dividend this company year.

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    The traditional way was for companies to pay a dividend once a year, and a lot of companies still do that. Paying yourself less than you need to live on and topping it up with regular dividends is more of a tax avoider thing.
    Will work inside IR35. Or for food.

  6. #6

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    Quote Originally Posted by VectraMan View Post
    The traditional way was for companies to pay a dividend once a year, and a lot of companies still do that. Paying yourself less than you need to live on and topping it up with regular dividends is more of a tax avoider thing.
    strange most shares I have pay 2 dividends one 'interim' which is based on the 6 monthly forecast and one final which is after the accounts are finished and they actually know how much they can issue.

    However it is suggested it can be more frequent, quarterly seems popular.

    Dividend timetable | HSBC Holdings plc
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  7. #7

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    Quote Originally Posted by VectraMan View Post
    The traditional way was for companies to pay a dividend once a year, and a lot of companies still do that. Paying yourself less than you need to live on and topping it up with regular dividends is more of a tax avoider thing.
    I'm aware of how that might look. My accountant provides a planner by the month as to 'remaining dividends allowed', so there's some implicit understanding that this is done. Although now you mention it, shifting it to quarterly wouldn't upset me much.

  8. #8

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    Quote Originally Posted by vetran View Post
    strange most shares I have pay 2 dividends one 'interim' which is based on the 6 monthly forecast and one final which is after the accounts are finished and they actually know how much they can issue.

    However it is suggested it can be more frequent, quarterly seems popular.

    Dividend timetable | HSBC Holdings plc
    Some of the share holdings I have pay 2 interim and one final. Bloody annoying as you have to work out why you suddenly have some money.
    "You’re just a bad memory who doesn’t know when to go away" JR

  9. #9

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    Quote Originally Posted by SueEllen View Post
    Some of the share holdings I have pay 2 interim and one final. Bloody annoying as you have to work out why you suddenly have some money.
    first world problems

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    Quote Originally Posted by pr1 View Post
    first world problems
    Yep.


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