No doubt the same level of laziness precludes them looking at the rules etc.
Thanks for your input and comments. You are also accusing me of laziness. I would appreciate it if you would point me in the right direction in looking at the rules. I could not find anything specific on HMRC website where else do I look?
There are many criticisms to be made of that post. Not least that it displayed the same level of laziness and lack of information as in the OP itself.
It also shows what happens when you rely on the rubbish that's all over the internet. Why not look at the rules themselves?
Thanks for you comments and criticisms about my original post and subsequent comments. As I explained in replies to others they were not my comments. I was quoting what I read on the internet, and I was seeking advice. Accusing me (someone you don't know) of laziness and relying on rubbish is rather harsh I must admit. I am sorry if I gave you that impression. If I was relying on rubbish I wouldn't seek your advice on this platform.
Agreed. Any decisions on dividends are for the company and should be based on sound advice. My criticism was aimed at comments such as those made by the OP in the post of 19 Sept at 22.57 pm.
Thanks for your criticism aimed at my comments in my post of 19 Sept at 22.57 pm. I apologise for not being very clear. Those were not my comments that's why they were in inverted commas. They are the sort of comments I came across when I was doing some research and I wanted to discuss. I sincerely apologise if I have annoyed you.
If the client is selling the company, he might find that the buyer isn't keen to be buying company cash . That might be a bigger barrier than your ER problem.
But either paying out as dividends is a good idea even with ER/BADR, 7.5% being less than 10%, or it's a bad idea even without it, 32.5% being more than 20%.
So I really don't see why clients would be advised to pay dividends for the sake of BADR, if indeed that does happen (the point I tried, but obviously failed, to make with my first response).
Very good point. The comments in my post were not my ideas but examples of what I found on the internet. Hence why they were in inverted commas.
Agree Lion
It is back to pen and paper.
No idea how HMRC will reconcile
It's not rocket science.
Luckily for me, I only have three cases where they pay more than £4000 in NI a year. All of them will use up their EA by month 6. The difficult ones will be where they pay less than £4000 between months 5 and 12. Presumably they'll need to repay some CJRS. But they won't be able to quantify the debt until next April. Which is six months after the "amnesty" expires.
If they pay less than £4000 between months 5 and 12, why will they need to repay some CJRS? Surely, they will have unused EA which they can take forward to next year or use against other taxes? As long as they did not use any EA in month 1 to 4, and the CJRS calim for emp NI was not more than the actual emp NI paid in those months. Am I totally misunderstanding the whole thing?
Let me put some numbers to that.
Suppose an employer had a secondary NI liability of £300 a month and claims it back under CJRS for the first four months. In month 5, he claims EA.
The HMRC computer will credit him with £1500 in month 5 and £300 a month for the next 7 months. So £3600 - plus the CJRS claims of £1200 = £4800. But he only had secondary NI of £3600. He's claimed £1200 twice.
The HMRC system can't cope with reducing his EA, so his only option is to repay CJRS money. He can't keep it to credit against some other tax liability as he'd still have claimed twice for the same money.
Imho, of course.
Thanks for the figures. It really makes it easier. When he applies for EA in month 5, HMRC computer will credit him £4000 and not £1500. He did not use any EA in month 1,2,3, and 4. Therefore, the CJRS claims in those months were not claimed twice. In the remaining 8 months he uses £2400 EA, and he is left with £1600 to carry forward to next year. This is in line HMRC rules, in my humble opinion. The whole thing is a mess anyway.
My answers
Thanks for your input and comments. You are also accusing me of laziness. I would appreciate it if you would point me in the right direction in looking at the rules. I could not find anything specific on HMRC website where else do I look?
Thanks for you comments and criticisms about my original post and subsequent comments. As I explained in replies to others they were not my comments. I was quoting what I read on the internet, and I was seeking advice. Accusing me (someone you don't know) of laziness and relying on rubbish is rather harsh I must admit. I am sorry if I gave you that impression. If I was relying on rubbish I wouldn't seek your advice on this platform.
Thanks for your criticism aimed at my comments in my post of 19 Sept at 22.57 pm. I apologise for not being very clear. Those were not my comments that's why they were in inverted commas. They are the sort of comments I came across when I was doing some research and I wanted to discuss. I sincerely apologise if I have annoyed you.
Very good point. Thanks.
Very good point. The comments in my post were not my ideas but examples of what I found on the internet. Hence why they were in inverted commas.
Yes, the company has cash in company bank account. Sorry about the late response.
No debtors or overdraft. The company has surplus cash in the company bank account.
Sorry my mistake! Yes the company has surplus cash in the business bank account of the order of 300k. No overdraft.
'Cash rich trading companies can struggle to meet the trading company requirements'
'The general view taken by HMRC is that cash built up should be extracted as a dividend and taxed as such'
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Thanks for the figures. It really makes it easier. When he applies for EA in month 5, HMRC computer will credit him £4000 and not £1500. He did not use any EA in month 1,2,3, and 4. Therefore, the CJRS claims in those months were not claimed twice. In the remaining 8 months he uses £2400 EA, and he is left with £1600 to carry forward to next year. This is in line HMRC rules, in my humble opinion. The whole thing is a mess anyway.