filing online tax return

debtfree1day

Hello, I am mrs and trying to fill in my 12-13 tax return


In feb 13 my husband went self employed and set up a limited company, and we are the 2 and only shareholders. We haven't completed the business profit and loss by filing accounts with company house as this is due in FEB 14, yet on my tax return it asks what dividends I have received for 12-13


Should I put zero? My concern is


1 - I don't want to get it wrong and get it trouble


2 - I am nervous of losing any allowance (during the full 12 month rolling period feb 13 - feb 14 the business has net profit of c £60k, so I expect hubby and I will each take £30k dividend and pay about 20% tax so £6 each)


Hubby has an accountant who will do the business return this is just basic self assessed PAYE....any guidance appreciated?


Thanks

katsclaws

If the dividend hasn't been paid in the 2012-13 tax year you will not have to put it on a Self Assessment Tax return for that tax year.
If your company year end is February 2014 how do you know what profits will be ?

Davide123

Isn't your accountant doing the tax returns for you?

00ec25

as katsclaws says, if you did not receive a dividend by 5 April 2013 then you have nothing to declare on your own 12/13 tax return and so if you had no other income for 12/13 then your personal allowance has been lost since you did not use it


this will only impact you for 12/13 as going forward I assume you will then time the dividends better to align with the tax year

debtfree1day

Thanks all, yes the accountant will do company returns. He has all the receips for expenditure and invoices bacnk statements etc, but this is just end of year self assessment.


00ec25....what do you mean time the dividends better? In reality we have been taking money from the business (i.e unofficial dividends) for the past 12 months, just transferring money to live on, and then in Feb this year, I thought our returns will show something like


Income 110000
expenses 40000
salary (husbands) 12000


Profit 58000


All taken as dividend - 28000 each


And then we will owe 20...or 21% or whatever corporation tax is of the 28000 each?

zygurat789

00ec25 wrote: »

you have a Ltd Company - there is no such thing as "unofficial" dividends, either a dividend has been declared in accordance with company law or cash withdrawn from the business by its owner/manager directors is in fact drawings aka salary and chargeable to Income tax and NIC. You cannot convert money taken out in earlier periods to an official dividend declared at a later date

Have you been taking a formal salary from the company so you use up your income tax personal allowance and also get the NI contributions history?

This is not invariably the case. It is quite possible to draw money from an LTD without it being dividend or in any way liable to Income tax and NI.
So long as the current account shows that the directors/shareholders have maintained funding throughout the year HMRC can have no claim for any moneies taken out.
This is a first year and we have not been told what the funding arrangements are and it may well be that these "unofficial dividends" should have been done legitimately, a technical offence but it goes on all the time.
It is normal and usual for the accountant in such cases to also do the tax returns of the directors/shareholders to ensure that they all tie up and to get the best result, ie pay the least amount of tax.

debtfree1day

guys, you are scaring me


hubby is a consultant so each month he puts an invoice in, gets the cash, pays himself a nominal salary to ensure he uses personal allowance and pays the NI as per his payslip at the post office


then he has transferred excess money each month into the personal account which we have spent or invested in an isa with a view to having enough to cover 20-25% of income for corporation tax.....the point being we didn't spend all of it and end up with a problem


will we be ok?

zygurat789

debtfree1day wrote: »

guys, you are scaring me


hubby is a consultant so each month he puts an invoice in, gets the cash, pays himself a nominal salary to ensure he uses personal allowance and pays the NI as per his payslip at the post office


then he has transferred excess money each month into the personal account which we have spent or invested in an isa with a view to having enough to cover 20-25% of income for corporation tax.....the point being we didn't spend all of it and end up with a problem


will we be ok?

Most likely yes. It is only a technical offence.

You are familiar with the payslip and how you receive one when you are working. Well what you/your accountant should do is:- Prepare a draft company minute declaring a dividend leaving only the amount and date blank and photocopy. You now have a form to complete every month, hey presto official dividends.

All monies you will have drawn will have been charged to your current account with the company when a dividend is declared it will be a book entry only and will be credited to your current account thus keeping you honest.

debtfree1day

thanks


I have self assessed! and paid my few pounds of owed tax for 12-13....


online now with hubby trying to do his....it says at the beginning were you self employed during 12-13 as he started in feb he has said yes and named the company..... then he is asked the following info, even though without made up accounts there is not really any income, loss etc etc to declare???

• Correct accounting details
  
• Enter income
• Enter capital allowances
• Enter adjustments
• Enter losses
• Enter tax deducted
• Enter class 4 NIC
• Enter additional information
• View summary

nomunnofun

debtfree1day wrote: »

thanks


I have self assessed! and paid my few pounds of owed tax for 12-13....


online now with hubby trying to do his....it says at the beginning were you self employed during 12-13 as he started in feb he has said yes and named the company..... then he is asked the following info, even though without made up accounts there is not really any income, loss etc etc to declare???

• Correct accounting details
• Enter income
• Enter capital allowances
• Enter adjustments
• Enter losses
• Enter tax deducted
• Enter class 4 NIC
• Enter additional information
• View summary

He is NOT Self-Employed. He is a director of a LTD company which means that he is an employee (of the company).
Fill in the employment section instead. Glad you came on - this could have created a lot of problems!

You did say this 'was basic PAYE' in your first post.

Also the tax on dividends on your income is 10% - not 20%. These are NOT entered on the employment section but under 'income from savings and investments'.

debtfree1day

thanks so much that makes a lot of sense


he is a director and receives dividends


I am thinking as he only started up at end of feb and then commenced an assignment which was paid at end of month so received no income until 30th march, we should just show zero dividend


he only started taking a salary on 6th april to coincide with the new tax year soI don't even think I need to show under employment either?