Any Accountants On The Forum

[bhinderharminder]

hi guys,
i registered a Ltd company last year and i got a letter through the post reminding me to do an anual return. All i want to do is make the company dormant. Dose anyone know how to do this. I tryed doin it online but i dont understand the form.
Cheers

 

[Stu DemonD]

PM me the company name, and I will do a quick company search on it - even if you want to keep the company dormant, you still need to file an Annual Return each year - fee is £15 online, or £30 by cheque.

Dormant accounts do not need to be sent off with the Annual Return - I will give you deadlines for that once I know the company details You can either fill out form DCA, or prepare more formal accounts - this won't be an issue.

 

[poggy]

Don't forget, we did on a dormant company and got fined for it. After pleading that it was a mistake, I did get the fine wiped out though.

Stu can confirm this, but if it is the first year you can change the "end of year" date and give yourself some extra time.

 

[Stu DemonD]

The deadline for the dormants is miles away, now done a company search, so all in hand

Main thing is to get his Annual Return sorted by early Jan :spin:

 

[poggy]

I have a quick question for you. What is the corporation tax in the April 2008 year for a company turning over less than £2M. And if you take a dividend on this, do you pay any personal tax (after corp tax paid).

If you also own another company (say turnover £1M) what are the rules on two dividends from companies with shared directors.

I keep getting different answers

 

[Stu DemonD]

Turnover has nothing to do with Corporation Tax rates - that is based on the profits before dividends.

Current CT rates are here:

http://www.hmrc.gov.uk/rates/corp.htm

This will be pro-rata for companies that have year ends NOT falling on 31st March.

As for personal tax on dividends, this all depends if you are a higher rate tax payer or not. If you pay basic rate tax, and your dividend keeps you below the 40% threshold, then no further tax to pay

BUT if you hit higher rate tax, the dividend rate is at 32.5% - there is a notional tax credit though, so in effect you end up paying 1/4 of the dividend RECEIVED - i.e. if on a salary of £45k PAYE, and receive a £40k dividend, expect to pay an £10k over on your self-assessment return.

 

[Stu DemonD]

As for second part of question, if you have controlling interests in TWO or more companies, then the CORPORATION tax bands above get amended - by the same ratio.

So current Small Company Rateof 19% / 20% is based on profits up to £300,000 - if you are part of an irreducible group in both companies that owns more than 50%, then this banding drops down to £150,000. And down to £100,000 if you own three companies with the same structure, etc.

Again, dividends doesn't matter - that is personal tax, and has nothing to do with corporation tax.

 

[bhinderharminder]

Thanks Stu for helping me out on this, cheers

 

[ChrisMClark]

Is there anything you don't know about, Stu? lol

 

[FDF]

Very rich people employ accountants to ensure they remain very rich. The people who cannot afford the services of an accountant, ironically, are the people who could most benefit from their advice.

Funny that

 

[Stu DemonD]

Funny, I have numerous clients on my books, including taxi drivers and gardeners - they are not exactly rolling in it....

 

[FDF]

Not criticising, just sharing a point of view. I'll shut up now.

EDIT: In the words of Columbo, just one more thing, if you're self employed like a lot of taxi drivers and gardeners you would be foolish not to employ someone who knew the tax system.

 

[poggy]

The system is a nightmare to understand. We have one accountant for one company and another for the other company and they both tell me different things.

I thought the dividend thing was wrong and you had to pay personal tax regardless. It's the way it has always been done.

I have one more question, is there anyway to share the dividend with your wife other than split shares. Also if say three directors own a 1/3rd of the company each, is there anyway to take unequal dividends or could you take additional money as expenses (if you can justify it.)

You could set up a Fiat accounting service Stu.

 

[Stu DemonD]

I have one more question, is there anyway to share the dividend with your wife other than split shares. Also if say three directors own a 1/3rd of the company each, is there anyway to take unequal dividends or could you take additional money as expenses (if you can justify it.)

Bit difficult - you as shareholder are receiving the money, therefore you get taxed accordingly on it; for your wife to have some [to utilise her basic rate band for example] she would need to become a shareholder - can't really see a way around this.

As for unequal dividends, how? You declare an amount per share - granted, one may want to get into dividend waivers, but let's not go there.

Why not pay yourself bonuses - these don't have to be equal - but of course there are Tax and NI issues, although the company will get tax relief on them.

 

[hmallett]

Bit difficult - you as shareholder are receiving the money, therefore you get taxed accordingly on it; for your wife to have some [to utilise her basic rate band for example] she would need to become a shareholder - can't really see a way around this.

What about if she became an employee?

 

[Stu DemonD]

What about if she became an employee?

She could, but then there would be Tax and NIC issues - something avoided if paying it as a dividend.

Also, certain duties would need to be performed in the business, which again may be problematic.