Dividend Query

Declaring a £5k dividend using JAN-DEC profits

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Hello

I have a fairly new Limited Company (running over 2 years). I made no profit in 2017 and so I didnt take out any dividend.

From Jan18-Mar18, I made a profit of £10K. From Apr18 to Dec18 I have made approximately £30K in total.

The Company has 3 Shareholders with 3 different classes. As the tax free dividend allowance was £5k before Apr18, can the 3 Shareholders take out £5k each (£15K) or can only £10K be distributed as the profits from Jan18-Mar18 only sum up to a profit of £10k?

My accountant (who just handed in her disengagement letter) has previously advised we can all take the £5K dividend as the full year (2018) profits are likely to be over £15K. 

I would appreciate any guidance on this!

Thanks

Hannah

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RLI
By lionofludesch
21st Dec 2018 17:20

You can only declare a dividend now or in the future.

So if you haven't declared one yet, you're too late to declare one for 2017/18 and you've all lost the £5000 allowance for that year.

You can still have £2000 tax free for this year, though.

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By andy.partridge
21st Dec 2018 18:18

You are way too late to do anything about 2017/18.

So far for 2018/19 you have the cumulative profits of £40k, less a provision for corporation tax of, say, £8k leaving up to £32k to distribute as dividends.

If you have not misunderstood your former accountant, then your former accountant is wrong.

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