Can someone clarify how much this director personally earned for this year? On the financial statement for his small limited company it says (in column format); `Advances/credits to the director'=£72654 then next to this `Amounts repaid'= (£92883) then next to this `Balance outstanding'=(£20234). Then there is a section called `Related party transactions' where it states that the company purchased an annuity contract from this director for £150,000 two years previously and that the company will receive an annual payment of £480 for his lifetime. It also states he got £89500 dividends. What can one tell from this about what this director earns? How much tax would he have to pay on the dividends? Would any of his expenses/pensions etc have to be declared on his tax return also? many thanks
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Of the things you mention, the only one that is his income is the dividends of £89,500. He may have had salary and benefits in kind as well, but you would usually not be able to discern that from the accounts alone.
What is your interest in the company and this director?
With all due respect, OP, this director's earnings are none of your business.
This is just outrageous nosiness.
That’s not the real question, is it?
Can anyone with an accounting background help please? I thought this was a pretty straightforward question! thanks if so.
OK - well, the loans advanced aren't earnings, the repayments aren't earnings, the balance at the year end isn't earnings, the dividends aren't earnings, the £150,000 sale of annuity isn't earnings and the £480 a year isn't earnings.
So, on the basis of the information you give us - nothing.
What you would like to know is his salary, which isn't disclosed.
Not as straightforward as you'd have us believe.
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