£11k tax on £25k earnings - seems excessive?!

deaston

Dazed_and_confused wrote: »

Wayne

I think this may be a joke post

Well I'm not sure what the punchline is.

TheCyclingProgrammer

deaston wrote: »

Seven years of being self employed and he's my fourth accountant (one of my past accountants is currently in prison). I explicitly said to this accountant I wasn't looking to do anything illegal/dodgy and wanted to pay the tax I rightfully owed.

So I'll be sure to flag-up this dividend issue, but I'm not changing accountants again!

There are plenty of good accountants out there. Unfortunately it doesn't sound like yours is one of them.

Pennywise

deaston wrote: »

Seven years of being self employed and he's my fourth accountant

Where do you find your accountants? The vast majority are honest and competent. You've either been very unlucky or have been looking in the wrong places/for the wrong type of person.

Were all 4 fully qualified accountants, i.e. "chartered"? Remember literally anyone can call themselves an accountant or run an accountancy practice - ideally you should do due diligence to check them out before you appoint them. If you use a "chartered", or "chartered certified", or "chartered management" or "chartered tax advisor" at least you have comfort they've passed the exams, have relevant work experience, are regulated/monitored, etc.

deaston wrote: »

but I'm not changing accountants again!

So you've got yet another "iffy" accountant, you know that now, but you're not going to change anyway??????

You'll never trust them again, so your professional relationship has broken down and you really do need to change to someone you can trust, otherwise no point in having an accountant.

deaston

Pennywise wrote: »

Where do you find your accountants? The vast majority are honest and competent. You've either been very unlucky or have been looking in the wrong places/for the wrong type of person.

Were all 4 fully qualified accountants, i.e. "chartered"? Remember literally anyone can call themselves an accountant or run an accountancy practice - ideally you should do due diligence to check them out before you appoint them. If you use a "chartered", or "chartered certified", or "chartered management" or "chartered tax advisor" at least you have comfort they've passed the exams, have relevant work experience, are regulated/monitored, etc.



So you've got yet another "iffy" accountant, you know that now, but you're not going to change anyway??????

You'll never trust them again, so your professional relationship has broken down and you really do need to change to someone you can trust, otherwise no point in having an accountant.

The first three were suggested by colleagues. My current accountant was (is) the accountant for a company I worked for fifteen years ago. I figured, if they've been in practice for fifteen years, they're ok.

deaston

Wayne_O_Mac wrote: »

So you paid yourself a £102000 dividend? Or are there other shareholders?

And if you didn't pay yourself that dividend, did the company have enough profits that it could have paid you a £102000 dividend?

No other shareholders. I'm not sure exactly how much I paid myself, but it was certainly over £100k

[Deleted User]

deaston wrote: »

Seven years of being self employed and he's my fourth accountant (one of my past accountants is currently in prison). I explicitly said to this accountant I wasn't looking to do anything illegal/dodgy and wanted to pay the tax I rightfully owed.

So I'll be sure to flag-up this dividend issue, but I'm not changing accountants again!

Seven years trading and four accountants and you still believe that you are self-employed!

Free advice - you are not!

deaston

[Deleted User] wrote:

Seven years trading and four accountants and you still believe that you are self-employed!

Free advice - you are not!

Care to explain? I know I'm an employee of my company if that's what you're angling towards.

[Deleted User]

deaston wrote: »

Care to explain? I know I'm an employee of my company if that's what you're angling towards.

Indeed - and that means you are definitely not self-employed.

deaston

[Deleted User] wrote:

Indeed - and that means you are definitely not self-employed.

I'll be sure to never again refer to myself as self-employed. Thanks for the advice.

TheCyclingProgrammer

Here's another potential issue: was your partner issued new shares or did you gift her some of yours? If you gifted some of your share were your shares valued for CGT purposes and did you declare any gain on your tax return? Given the level of dividends discussed I'm guessing the company may have been worth more than a nominal value.

Also if there was a share transfer was a share transfer form completed?

Have you considered the consequences of your partner owning 15% of your company should you split up? She's under no obligation to give the shares back to you and she would continue to be entitled to 15% of each dividend you pay out.