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Paying dividends

Quick query. I have a client who started a new company last year and has been surviving on savings to build up the company and has also paid themselves a small salary from the company (sufficent to cover their personal allowance). Now it is their year end and we are coming to the end of the tax year they have sufficent profits to pay a dividend. If they pay an amount of say £20-30K all in one go would this raise concerns by HMRC?

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26th Mar 2012 14:57

No, provided the dividend is done properly with sufficient distributable reserves, board minutes & dividend vouchers etc.  Paying minimum salary + dividends is common practice.  You don't give enough information to comment on other areas (IR35, wife's remuneration, etc) but the simple answer is as I say.... no.

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26th Mar 2012 15:12

Thank you. I justed wanted to check with someone as you would if you worked in an office. All the above would be done. It was just a query from a bookkeeper that made me 'just want to check'. Again, thank you.

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By JAADAMS
26th Mar 2012 16:30

Check this article out

 

http://www.accountingweb.co.uk/topic/tax/dividends-checklist-get-details-right/470525

You might like to put your mind at rest (or not as the case may be!) by reading this article. It details what you need to do to minimise any queries from HMRC on dividends/loan accounts etc

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