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Tax credits and profit from limited company
dawn9999_2
Posts: 7 Forumite
I'm confused.
Our business (mine and husband's) made quite a bit less profit last financial year - I've decided to try to claim tax credits. We are both employees of the company and take the standard 5200 each tax free pay. When filling in my form I put in our income from employment as 5200 each, and put in the £10600 profit for the year ended June 09 as other income. I neglected to put in an estimate so I will have to phone and correct this. But is this correct? Is our income 2 x 5200 plus £10600 ??? We don't take the dividend as an exact payment - we just withdraw amounts that we need personally via transfers each month into our private account. I'm concerned that we're not entitled. Please help!
Our business (mine and husband's) made quite a bit less profit last financial year - I've decided to try to claim tax credits. We are both employees of the company and take the standard 5200 each tax free pay. When filling in my form I put in our income from employment as 5200 each, and put in the £10600 profit for the year ended June 09 as other income. I neglected to put in an estimate so I will have to phone and correct this. But is this correct? Is our income 2 x 5200 plus £10600 ??? We don't take the dividend as an exact payment - we just withdraw amounts that we need personally via transfers each month into our private account. I'm concerned that we're not entitled. Please help!
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Comments
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How do you account for these random withdrawals?Gone ... or have I?0
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Just list them in my spreadsheet and the end of the year when I submit my books.0
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Er... You've got me there.. Something to do with the directors loan account??0
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Can anyone help?
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You need to speak to your accountant. If the withdrawals were dividends or to provide you with an income, they need to be declared. If they were to repay a loan, they are not income and therefore need not be declared.Gone ... or have I?0
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Yes I will phone him after the hols. But I'd like to know more now! Just spoken to hubby. The directors loan account is 100k is. We take £2500 ish per month for personal expenses. We paid practically no tax, just a couple of hundred quid, due to much lower profits. Can you make any sense of that dmg? Many thanks if you can!0
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I assume we are eating into our directors loan account at an alarming rate!..0
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I suspect your accountant is trying to avoid your tax liability. Whilst not illegal, it is highly immoral. Also, if not done properly, it will leave you with an almighty bill if you are ever investigated.
No one here can tell you what your accountant is trying to do. If in any doubt I would get a second accountant to go over your accounts.Gone ... or have I?0
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