dividend withdrawn

[sun_ksh]

Hello

Myself will be applying for tier 1 extension –general this month on 15th. I am limited company employed as director and claiming for 1-1-10 to 31-12-10 period (12 month period).

Upto 31-3-10 I have my company accounts filled.

For the period 1-1-10 to 31-1-10, my company earned 30000 pounds- with app.10% VAT return the turnover is approximately 27000 pounds. I withdraw salary of 1000 / month. So the taxable company earning for this period is 24000 pound. Take 20 percent company tax and the company net profit after tax is app 19000 pounds. This 19000 is available to withdraw as dividend. Since I am 50 percent shareholder in company I can withdraw 9500 as dividend based on the actual company earnings during 1-1-10 to 31-1-10. But I have withdrawn 20000 dividends in the said period because there was reserve fund available in company account carried over from last year.

My confusion is I am right is showing 20000 dividend as my earning for the period between 1-1-10 to 31-1-10? Or do i need to show only 9500 pounds as my earning from dividends. Please advise what is the correct way? Is the dividend need to be from the net profit made by the company during the period which we claim for?

From 1-4-10 to 31-12-10 period also I am relying on dividend higher than earned (since there was reserve fund available in company) to satisy the earning criterion of 40000 pounds which will fetch me 45 points for extension application.

Thanks
Sunny

[sun_ksh]

will somebody reply on above please?

will be helpful.

thanks

[sun_ksh]

can somebody reply on this query please?



thanks

[HSK Accountancy Services]

Hello

Myself will be applying for tier 1 extension –general this month on 15th. I am limited company employed as director and claiming for 1-1-10 to 31-12-10 period (12 month period).

Upto 31-3-10 I have my company accounts filled.

For the period 1-1-10 to 31-1-10, my company earned 30000 pounds- with app.10% VAT return the turnover is approximately 27000 pounds. I withdraw salary of 1000 / month. So the taxable company earning for this period is 24000 pound. Take 20 percent company tax and the company net profit after tax is app 19000 pounds. This 19000 is available to withdraw as dividend. Since I am 50 percent shareholder in company I can withdraw 9500 as dividend based on the actual company earnings during 1-1-10 to 31-1-10. But I have withdrawn 20000 dividends in the said period because there was reserve fund available in company account carried over from last year.

My confusion is I am right is showing 20000 dividend as my earning for the period between 1-1-10 to 31-1-10? Or do i need to show only 9500 pounds as my earning from dividends. Please advise what is the correct way? Is the dividend need to be from the net profit made by the company during the period which we claim for?

From 1-4-10 to 31-12-10 period also I am relying on dividend higher than earned (since there was reserve fund available in company) to satisy the earning criterion of 40000 pounds which will fetch me 45 points for extension application.

Thanks
Sunny

Can you give more details about your reserves? How long ur company is operating? Have you paid your corporation tax for previous periods?

[sun_ksh]

company is operating since Sep 2008. Reserves on year end 31st march 09 was 30K. Reserves on year ended 31st march 2010 was 37k.

corporation tax paid 18k for year ended march 10.

[aliq09]

Hello

Myself will be applying for tier 1 extension –general this month on 15th. I am limited company employed as director and claiming for 1-1-10 to 31-12-10 period (12 month period).

Upto 31-3-10 I have my company accounts filled.

For the period 1-1-10 to 31-1-10, my company earned 30000 pounds- with app.10% VAT return the turnover is approximately 27000 pounds. I withdraw salary of 1000 / month. So the taxable company earning for this period is 24000 pound. Take 20 percent company tax and the company net profit after tax is app 19000 pounds. This 19000 is available to withdraw as dividend. Since I am 50 percent shareholder in company I can withdraw 9500 as dividend based on the actual company earnings during 1-1-10 to 31-1-10. But I have withdrawn 20000 dividends in the said period because there was reserve fund available in company account carried over from last year.

My confusion is I am right is showing 20000 dividend as my earning for the period between 1-1-10 to 31-1-10? Or do i need to show only 9500 pounds as my earning from dividends. Please advise what is the correct way? Is the dividend need to be from the net profit made by the company during the period which we claim for?

From 1-4-10 to 31-12-10 period also I am relying on dividend higher than earned (since there was reserve fund available in company) to satisy the earning criterion of 40000 pounds which will fetch me 45 points for extension application.

Thanks
Sunny

Hi,

You have to go to qualified accoutant for your case and IMO, Dividend are after tax . In a simple way your company is earning and here is the equation:

Dividend: Company profits- ( TAX)- expense

Than you will distribute the dividend in the end of year or as you like .. there are bands in Dividend and you have to pay tax on them .

Please , go to some good accountant and make your case straight before going to Home office for extension.

Ali

[blackthunder]

to be on safe side, i would take the dividends from the money earned during the present year..

[sun_ksh]

Sheraz Khalil MBA ACCA , Sushil-ACCA: Any guidance on this?

thanks

[HSK Accountancy Services]

Sheraz Khalil MBA ACCA , Sushil-ACCA: Any guidance on this?

thanks

Hi,

You can claim only 50 % of total dividend because you are only 50 % share holder. If you have paid taxes etc for last years and have running company then you have a pretty strong case.

Some time the case workers dont have technical knowlege about reserves etc so cannot say with 100 % assurance that they will not object about using previous year reserves but if you present your case in a good and organised way then should be ok. there are always different options!

Thanks for PM but sorry I dont reply in PM. ask any questions here or contact me directly.

Regards,

[sun_ksh]

Thanks for the clarification

[Sushil-ACCA]

some time workers r smart they ask list of clients unless u have retail trade even retail tade u need to show sales greater than yr all expenses etc

yr accountig in real life is good but for ho point of view u have not earned income in last 12 months , a peson with normal Iq can say that u have not follwoed guideline of 12 months earning


sorry for late reply

hope u get positive reply

[sun_ksh]

Thanks a lot

Claimed period 1-1-10 to 31-12-10 :

Earlier i was splitting the period from 1-1-10 TO 31-3-10 (as my accounts were filed upto this period and have accurate informaion about my earning , tax, profit etc.etc. ) and from 1-4-10 to 31-12-10 (any figures in these period will be draft as the account for year ending 31-3-11 is not yet done).

Now, i am thinking of claiming of the entire period 1-1-10 to 31-12-10 as one block . This enables me to have more profit from company. But in this case, the earning I will be supplying for the entire duration will be draft earning as the final account and therefore the final net profit figure for company is not available yet.

Will this be allowed ? or since i am claiming for 1-1-10 to 31-12-10 period, do I need to show the exact earnings upto 31-3-10?

Hope i am clear in writing.

thanks

[Sushil-ACCA]

you have to get a/cs done for jan to dec

u cant play with overall numbers in 1st qrte of next year on ground of draft accts

some people feel they can show losses in other period they r breaking immigration law , those accoutants suggeting them are also fooling their applicants or they r ignorant need to go to school back.

dividend is declared from profit and if some one fiddle n future with numbers they have done window dreesing in first place and a crime

all the best

[manjit14]

I am not sure on this one, but I think director's salary and dividend is classed as salary, this is the Gross, after paying corporation tax on Dividend and your NI and Income Tax for the Director's salary is your net income. VAT cannot be shown as salary, cause effectively ur collecting tax a.k.a VAT on HMRC's behalf. Your returns should reflect all this, and that means, company returns, your personel returns and VAT returns.