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Dont know what the context is but Retained earnings are the P/L balance which are kept in the Share Holders account after payment of all operating and financing expenses and dividends. These are maintained in an account designated as Shareholder's account.Rashid wrote:Could somebody confirm that its OK to take out my earnings from my business (its a sole tradership and hence, I am the only owner) as I have already spent a lot from my business account and therefore, don't have much left in my account. Plz answer in the context of HOME OFFICE'S term "earnings/profits retained must be retained in the business" as I don't understand what does it exactly mean?
None taken. I'm not entirely sure about sole tradership. But if you run a limited company / business you're not allowed to transfer money from bus account to personal account as this is illegal and that also means personal tax evasion.Rashid wrote:Can somebody else comment on XPACAPABLE's statement? as I really don't understand it. Throughout the world, amounts are transferred from biz to personal accounts (especially in case of sole tradership like mine) bcoz we genuinely need to use our earnings.
XPSCAPABLE's >>> Thankx for your help. Plz don't take my words as funny or dis-respectful; just wantd to have others' opinion about this matter as well.
CONSULT : www.taxassist.co.uk/ealingRashid wrote:Could somebody confirm that its OK to take out my earnings from my business (its a sole tradership and hence, I am the only owner) as I have already spent a lot from my business account and therefore, don't have much left in my account. Plz answer in the context of HOME OFFICE'S term "earnings/profits retained must be retained in the business" as I don't understand what does it exactly mean?
What you are saying is completely wrong. I would suggest consult www.taxassist.co.uk/ealingxpscapable wrote:None taken. I'm not entirely sure about sole tradership. But if you run a limited company / business you're not allowed to transfer money from bus account to personal account as this is illegal and that also means personal tax evasion.Rashid wrote:Can somebody else comment on XPACAPABLE's statement? as I really don't understand it. Throughout the world, amounts are transferred from biz to personal accounts (especially in case of sole tradership like mine) bcoz we genuinely need to use our earnings.
XPSCAPABLE's >>> Thankx for your help. Plz don't take my words as funny or dis-respectful; just wantd to have others' opinion about this matter as well.
This rule applies pretty much around the world, in countries where there are corporation law.
For sole trader, I'm not sure how that works. So best talk to accountant.
Nope I am right, same with the the thousands of contractors who operate under limited company structure.mambal06 wrote: What you are saying is completely wrong. I would suggest consult *** spam removed ***
They specialises in HSMP cases.
I AM A QUALIFIED FCCA, ACA SURELY I KNOW BETTER THAN YOU.xpscapable wrote:Nope I am right, same with the the thousands of contractors who operate under limited company structure.mambal06 wrote: What you are saying is completely wrong. I would suggest consult *** spam removed ***
They specialises in HSMP cases.
http://www.contractoruk.com/managed_service_companies/
Nope you are wrong, mambal06 is right. The defination of retained earnings is wider than whatever is suggested at the website.xpscapable wrote:Nope I am right, same with the the thousands of contractors who operate under limited company structure.mambal06 wrote: What you are saying is completely wrong. I would suggest consult *** spam removed ***
They specialises in HSMP cases.
http://www.contractoruk.com/managed_service_companies/
I cant help but notice that this was the FIRST post by "Accountant" (Sun Apr 19, 2009 10:34 am), made just 8 minutes after mambal06's I KNOW BETTER THAN YOU (Sun Apr 19, 2009 10:26 am). Coincidentally, Accountant just joined today (19 Apr 2009) as well...Accountant wrote:Nope you are wrong, mambal06 is right. The defination of retained earnings is wider than whatever is suggested at the website.
hmmm......LankanFunkin wrote:I cant help but notice that this was the FIRST post by "Accountant" (Sun Apr 19, 2009 10:34 am), made just 8 minutes after mambal06's I KNOW BETTER THAN YOU (Sun Apr 19, 2009 10:26 am). Coincidentally, Accountant just joined today (19 Apr 2009) as well...Accountant wrote:Nope you are wrong, mambal06 is right. The defination of retained earnings is wider than whatever is suggested at the website.
Hmm, a case of split persoality / multiple accounts?
Just taking the pi$$, no harm intended
IT COULD BE BOTH. AS FAR AS THOSE THOUSANDS OF CONTRACTORS ARE CONCERNED, SOME OF THEM ARE MY CLIENTS NOW AND ARE IN TORUBLE WITH BOTH INLAND REVENUE AS WELL AS HOME OFFICE (FOR VISA PURPOSES) AS THEY WERE FOOLED BY THESE ONLINE ACCOUNTANCY SERVICE PROVIDERS, MANAGED SERVICE PROVIDERS AND UMBRELLA COMPANIES. TAKING OUT SALARY FROM A COMPANY JUST TO COVER PA, AND REST IN DIVIDEND SEEMS THE BEST POSSIBLE WAY TO SHOW EARNING AND SAVE PERSONAL TAX AT THE SAME TIME. BUT IS IT REALLY THAT SIMPLE?????? OR IS THERE SOMETHING MORE TO IT? AND ALSO ABOUT CAPITAL GAINS. OH SO TAKE OUT ALL THE MONEY AND JUST PAY CAPITAL GANIS TAX WHICH IS MUCH LOWER.... BTW HOW LOWER? CAN ANYBODY EXPLAIN ME? HOW MUCH ONE WOULD PAY IF HE/SHE IS HIGHER RATE TAX PAYER AND HOW MUCH ONE WOULD PAY AS CAPITAL GAINS TAX UNDER THE SAME CRITERIA. AND SURELY, AS IT SO SIMPLE, THERE ARE NO OTHER TAX ISSUES INVOLVED. GREAT. MAY BE SPLIT PERSONALITY IS NOT SO BAD AFTERALL.LankanFunkin wrote:I cant help but notice that this was the FIRST post by "Accountant" (Sun Apr 19, 2009 10:34 am), made just 8 minutes after mambal06's I KNOW BETTER THAN YOU (Sun Apr 19, 2009 10:26 am). Coincidentally, Accountant just joined today (19 Apr 2009) as well...Accountant wrote:Nope you are wrong, mambal06 is right. The defination of retained earnings is wider than whatever is suggested at the website.
Hmm, a case of split persoality / multiple accounts?
Just taking the pi$$, no harm intended
Hi Alliyanu wrote:Accountant and Mambol6, this is a healthy arguement/discussion between you two.
I just want you to throw more light into this issue raised by Rashid and also support with links or references where possible because I can see this forum benefiting from this in a long time to come.
You guys have done well so far.
So accountant you are saying it is not right to transfer payment from Biz to personal a/c, right? So what is the best way to pay yourself when you operating a biz/limited company?
You have to be aware here that though it is limited company it is just a one director working for him/herself may be just an external accountant to prepare his/her a/c at the end of the acctg period.
Kindly throw more light please!