Hi,
One of my clients has a company which has not been working for 3 months, The director of this psc wants to take salary from the company to avoid dividend tax. Can he be given any salary when the company does not earn any income?
Thanks in advance
Replies (7)
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You say the company has not been working. What does that mean?
If the company can afford to pay him, why shouldn't he be rewarded with a salary?
If he only owes £5000, why not give him a £5000 dividend?
Assuming the profits are there, of course. We see numbers telling us what the loan is and, by implication, what you want the answer to be. You ask how you can know if the company can afford to pay a salary - how about preparing some of those old fashioned accounts thingies ?
If the company is actually actively trading but hasnt for example secured contracts which explains nil income then I dont see an issue with it