from business account / end of year accounts

Drawing from business account / end of year accounts

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ALISK
By atleastisoundknowledgable...
28th Feb 2020 17:56

Any even half decent accountant will help you plan this is the most tax efficient manner for you.

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By Accountant A
15th Jun 2020 20:50

675wen.pdf

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By Wanderer
28th Feb 2020 18:17

Quote:

Hi, I am a newbie so apologies as this is probably a very basic accounting question. If I have a limited company, will my company accounts be done on the basis of how much I physically draw out of my company account every year? I spoke to an accountant and he was talking about drawing different amounts of dividends. I take out £2000 amonth from my business bank account, so would my company accounts be done on the basis of the £24k being split between salary and dividends. Or do I physically have to draw more to make up my dividends. 

Then if I leave money in my business bank account, how do I draw on this in future?

Thanks in advance.

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Replying to Wanderer:
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By Manchester_man
29th Feb 2020 01:38

Quote:

Quote:

. I take out £2000 amonth from my business bank account, so would my company accounts be done on the basis of the £24k being split between salary and dividends. Or do I physically have to draw more to make up my dividends. 

Then if I leave money in my business bank account, how do I draw on this in future?

Thanks in advance.

Yes, you’d have to physically draw more to make up the dividends.

Regarding how to draw future funds from the account; good question.

There are several options here; you could go into the bank (assuming it’s not one of the online only banks, in which case you’re stuffed), and ask to withdraw the funds in coins. If you can get them to pay you in 1p and 2p coins, this will be tax free. If they end up giving you notes, ask for dividend vouchers to the value of the notes withdrawn, otherwise you will have real problems when preparing your personal tax return.

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By SXGuy
28th Feb 2020 18:17

Ask your accountant because your question makes no sense and at least he/she will be paid to answer your drivel.

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RLI
By lionofludesch
28th Feb 2020 18:24

I'm not kidding - I don't understand what the OP wants to do here.

But, if this helps .....

The company is not the director/shareholder. Legally, they're different people.

Company - taxed on profits for its accounting year

Director shareholder - taxed on salary/dividend drawn in the tax year.

If the director/shareholder draws out more than he's entitled to, it's possible that there'll be a 32½% charge on the excess.

Very simplistic explanation - discuss the detail with your accountant.

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Replying to lionofludesch:
Flag of the Soviet Union
By thevaliant
29th Feb 2020 10:58

"The company is not the director/shareholder. Legally, they're different people."

Schoolboy error there. In my experience, most small traders DO think they are the company, the company is them.

((To be fair, in my quieter moments of reflection, its an understandable position to take. But that's for another time.))

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Replying to thevaliant:
RLI
By lionofludesch
29th Feb 2020 11:15

Quote:

To be fair, in my quieter moments of reflection, its an understandable position to take.

Not really. If the bailiffs popped round, they'd be quick to point out that none of the assets belonged to the company. Even the ones that did.

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Replying to lionofludesch:
Flag of the Soviet Union
By thevaliant
01st Mar 2020 10:35

Ahhh very true (I've known that one too).

They are the company, the company is them. It is... until it isn't.

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ALISK
By atleastisoundknowledgable...
28th Feb 2020 18:29

Quote:

Good to see this is such an open and welcoming forum. Shame on you

I assume that that wasn’t for me ... I gave a pleasant reasonable answer I thought?

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Replying to atleastisoundknowledgable...:
RLI
By lionofludesch
28th Feb 2020 18:37

Maybe we'd be more welcoming if we knew who the hell he was.

I thought my reply was helpful too - given how vague the question was.

Yet - we have another querist who can't put a coherent question, doesn't like the answer he's given, hurls abuse, deletes his question and flounces off.

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Replying to lionofludesch:
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By Accountant A
15th Jun 2020 20:50

5w

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Replying to lionofludesch:
ALISK
By atleastisoundknowledgable...
28th Feb 2020 22:03

Quote:

I thought my reply was helpful too - given how vague the question was.

Indeed, it was very - given what we had to go off.

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By Accountant A
15th Jun 2020 20:50

i67

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RLI
By lionofludesch
28th Feb 2020 20:50

Why would be welcoming to Anonymous, who is a long established member of the forum ?

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RLI
By lionofludesch
28th Feb 2020 20:50

Dupl

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By legerman
29th Feb 2020 15:03

This site is for Accounting Professionals to ask questions of each other and discuss/debate, it is not for the general business community.

Your accountant is best placed to help you decide the most tax efficient mix of salary/dividends, based on your circumstances. On the info given, non of us would have been able to help you with that.

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