Dividend from last year - can it be paid this year?

[skyjumper007]

Hi guys and gals,

kinda a new here. looking for some advice

One man Limited Company with a turnover or around 58 - 60k /year. has been trading for 2 1/2 years now. outside IR35.

been to my accountant and this is what I'm told:
The limit for the higher rate threshold is unchanged from 2009/10 i.e £43,875
So if we say you have £7,000 salary you can pay gross dividends of £36,875 (£33,188 net)

Now my question is that I had only taken £7000 as salary in 2009 and took around £15k as dividends. I'm told that I can't take any more as Dividend for 2009-10 as I shd have taken it before April 2010. as it's now 2010-11 tax year now, anything I take out as dividend will have to be calculated for this financial year.

Any ideas or suggestions really appreciated

Ideally I shd be able to take out another 18k for the 2009-10 year (The company has got enough retained profit)

 

[robindunne]

Unused allowances cannot be carried over. Any dividends taken now will be taxed as 10/11 income, no matter when the business earned it. I know it's not the answer you were after, but time can't be turned back.

 

[DFL]

You can't rewrite history i'm afraid.

What you should have done is declared the additional divi at the time and credited the directors loan account if you didn't want to take the cash out of the company - this would then have utulised your allowance for the year. This is on the assumption that you had available profit at the time.

 

[skyjumper007]

thank you robindunne and DFL

can I not do it now? I mean

declare the additional dividend( by pre dating a letter) at the time and credited the directors loan account. Is it not just some paper works I need to do to get this in order. Sorry not very experienced in these and that's why I was paying my accountant to get these done in the right way, well I got the right advice, only a bit late.

 

[elaine@cheapaccounting]

The issue also applies to the salary - the employer end of year returns should have been filed by 19 May. Fine foe late filing is £100 / month.

 

[David Griffiths]

thank you robindunne and DFL

can I not do it now? I mean

declare the additional dividend( by pre dating a letter) at the time and credited the directors loan account. Is it not just some paper works I need to do to get this in order. Sorry not very experienced in these and that's why I was paying my accountant to get these done in the right way, well I got the right advice, only a bit late.

You mean can you do it by fraud and false accounting?

Just to clarify what you are asking?

 

[skyjumper007]

didn't mean fraud or false accounting in any way.

the salary thing has been filed in May, so hopefully no fines.

All I'm asking is I'm no expert in all these things and thus hired a Specialist in this area paying around £130/ month for all the paper works and expert advice. Now that I have realized it's not what I'm getting , I guess it's time to move on to someone who will do what they say they willl do.

No offense to all those who do their job properly. I mean I have requested more than on one occasion to give me the best way to manage the Salary/Dividend scheme, and of course I did get it correctly after 6 months of the deadline, no good right?

 

[elaine@cheapaccounting]

If you feel that your accountant has not given you the correct advice then make a complaint.

If your accountant is a member of a professional body such as ICAEW, ACCA etc then they must have a complaints procedure.

£130 / month - sounds like a contractor type firm?

Have a read of this:

http://www.cheapaccounting.co.uk/scrappage/youraccountsitcontractor.php

 

[Tom Egerton]

You don't say what your historical profits were and what you drew out of the company in the previous year. Your income for 2009/2010 appears to be around £22K and if you double it in the current year you will likely stay within standard rate tax. I'm not sure how your accountant is at fault since, as yet, there is absolutely no loss of tax to you.

In the longer term there may even be an advantage if you wind up the company and opt for a distribution under ESC C16 (subject to bank balances not being vastly in excess of working capital requirements).

I believe there is too little information in your post to conclude that your accountant has been negligent.