Hi
Due to the increase tax due on dividends would it be beneficial for the company to make the tax payments?
Currently the increase in tax means we need more dividends which results in more tax, then more dividned.... Would it be more tax efficient if the company paid the personal tax bills and incorporate these payments as a beneift in kind?
Thanks
Replies (22)
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Well it's a personal liability so how do you propose doing this and what will you achieve?
You haven't supplied enough information about the directors personal tax affairs to make an educated guess. Why not ask the director's accountants rather than us
A company is legally required to collect tax from the director if he is being paid under PAYE.
Not sure what you mean by dividends. Directors don't receive dividends.
Quote "Due to the increase tax due on dividends would it be beneficial for the company to make the tax payments?
Currently the increase in tax means we need more dividends which results in more tax, then more dividend...."
If the company pays your tax, you'll owe the company the money. There'll be a charge to s455 while you owe the company any money. You can only recover this by paying off your debt. Maybe with another dividend.
The fact is that a lot of folk - accountants included - have been ripping the backside out of dividend taxation for the last 45 years. HMRC have got a bit fed up with it and, perhaps belatedly, have decided they're going to make it less attractive.
It's still cheaper than paying a salary.
Sounds like you need to consult an accountant.
Sounds like you need to consult an accountant.
In 2012, he was holding himself out as one with various "I have a client ..." questions.
As I read your response, what you're really saying is, that our Christmas Tree friend, has made no tangible improvement, since 2012?
You sir, win QUESTION OF THE DAY!!!!
Congratulation for failing to comprehend even the basics of how tax works.
Well done given the very tough competition.
But what is that? Yes ! Indeed ! there is still time for someone to ask a more stupid question.
Should a company pay a directors Saturday afternoon shop at Asda?
The answer to that question is the same as the answer to yours.
Not that I've not seen a company-person basically be one and the same. It's MY company and MY money, so I'm definitely putting the Saturday afternoon shop through the company. Sundry expenses nominal is in excess of £100k.... and no salary nor dividends taken. Everyone's a winner... till they go to prison.
Sundry expenses is a dead giveaway on director drawings. Put it to cost of sales - much more subtle.
That would involve the client having a brain.
Plus, the level of 'Sundry' in this case was so high that even dumping it in Cost of Sales would've distorted the margin dramatically from industry norms.
Didn't Cameron make it acceptable, if not fashionable?
https://en.wikipedia.org/wiki/Piggate
Very true, C T charge is the one account heading for which I have never been asked by HMRC to supply a breakdown.
Wanting ones cake and eating it takes the biscuit (or the cake subject to one's VAT perspective)