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Yes - it's not unique. The amount paid will end up being debited as a director loan for you to pay back or for it to be 'converted' into a dividend at a later date.1.Has anyone come across similar similar situation?
Hard to step into the mind of a caseworker - they may not really know the laws behind dividends (not trying to sound patronising to them, their field of knowledge/expertise is going to be elsewhere that's all).2.Can HO raise any query on the same? (i.e, the error will be notified in the accountants covering letter)?
AccountantMatthew wrote:.... OK - just so that you aren't getting confused kans75 (or anyone else reading this) here is a good article about your situation that is relatively user friendly and that has been written with contractor company directors in mind. Just to clarify I am not connected with this website or the business behind it in any way:
http://www.contractorcalculator.co.uk/i ... ained.aspx
If you also want to know about the relevant statutes with this 'illegal dividends' then refer to s830, ss836-840 and s847 of the Companies Act 2006.
If you were alluding to backdating dividend declarations in your earlier post (I read it that you were just going to declare a dividend when you could do further down the line rather than backdating anything) then don't as it's illegal. Very illegal! Accountants shouldn't recommend this and I would like to think that they don't (and just to clear things up if anyone is trying to infer that I have done so in this thread then they are very, very wrong).
Interim dividends are also declared by directors and not accountants. However just to help you understand the situation and how you progress I suggest that you speak with your accountant with the link above giving you some further background.