Semantics

[Welsh Translator]

I have just come over in a cold sweat about something. I run a private limited company since September and pay myself a minimum salary and the rest in dividends. With each interim dividend payment, I have been recording them as dividends in the accounts and preparing all the necessary paperwork. However, when transferring the funds, I do a single transfer for salary, divs and expenses and use "Expenses/Remun" as a reference. It has now occurred to me that some experts in the field use "Remuneration" as another word for "Salary/Bonuses/Benefits etc" and distinguish between "Remuneration" and "Dividends". However, others seem to use Remuneration as a term for all kinds of payments to employees and shareholders, and regard dividends and salaries as two types of remuneration. I see from HMRC's website that they have used the term "Dividend Remuneration Strategy" on the ir35 page (I hasten to add that IR35 doesn't affect me, I simply did a Google search for Dividend Remuneration).

Is there any danger that HMRC could ever argue that although I have been paying legal dividends, the simple fact that I used the reference "Remuneration" means that it is classed as a salary and therefore liable to PAYE and NICs?

Thanks very much in advance.

 

[GillespieBS]

I don't see a reason to be concerned about what you call the transaction. If it is a dividend and you have raised a dividend voucher and it is shown in the financial statements as dividends then that's what it is.

It'll be good practice for your bank statements and books to show the correct description in the future for clarity.