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

deaston

TheCyclingProgrammer wrote: »

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.

I have considered us splitting up and she's agreed the shareholding would be returned.

I have no idea about capital gains and your other points - I'm guessing my accountant has sorted all that sort of stuff out.

TheCyclingProgrammer

deaston wrote: »

I have considered us splitting up and she's agreed the shareholding would be returned.

I have no idea about capital gains and your other points - I'm guessing my accountant has sorted all that sort of stuff out.

"I guess" isn't really good enough. It's your responsibility to make sure your tax affairs are in order. You presumably completed your tax return or you checked it before it was submitted?

Having an arrangement with your partner to return the shares if you split up doesn't help your case with regards to the settlements rules and is certainly no guarantee you will get them back. The shares are her property (and so are the dividends you've helped yourself to) and she has no legal obligation to return them.

More alarm bells.

deaston

TheCyclingProgrammer wrote: »

"I guess" isn't really good enough. It's your responsibility to make sure your tax affairs are in order. You presumably completed your tax return or you checked it before it was submitted?

Having an arrangement with your partner to return the shares if you split up doesn't help your case with regards to the settlements rules and is certainly no guarantee you will get them back. The shares are her property (and so are the dividends you've helped yourself to) and she has no legal obligation to return them.

More alarm bells.

I could see I was being backed into this particular corner.

I employ an accountant because I'm not fully aware of all the various intricacies of tax law. And nor do I ever intend to be - I'm busy doing my full-time job to spend years reading tax law.

Yes, I signed my tax return and I asked various questions, but there's comes a point I have to believe what my accountant is telling me, because I simply don't understand a lot of it.

You're very lucky that you fully understand shareholdings and settlement rules, but I think you'll find the vast majority of people don't.

If I knew everything I wouldn't have come here to ask questions.

TheCyclingProgrammer

Well you've been given answers, you've been advised that you would be better off finding a new accountant, what more do you want anyone to say?

deaston

TheCyclingProgrammer wrote: »

Well you've been given answers, you've been advised that you would be better off finding a new accountant, what more do you want anyone to say?

If you look back, you'll notice I'm on my fourth accountant in seven years. Perhaps you could suggest some accountants who are more competent?

TheCyclingProgrammer

deaston wrote: »

If you look back, you'll notice I'm on my fourth accountant in seven years. Perhaps you could suggest some accountants who are more competent?

I'm happy to recommend mine but they are a freelancer and contractor specialist. http://jf-financial.co.uk/

deaston

TheCyclingProgrammer wrote: »

I'm happy to recommend mine but they are a freelancer and contractor specialist. http://jf-financial.co.uk/

But every accountant I've ever had has been recommended to me - you're not explaining why i should believe and accept your recommendation.

TheCyclingProgrammer

deaston wrote: »

But every accountant I've ever had has been recommended to me - you're not explaining why i should believe and accept your recommendation.

Then do your own research.

Farcasting

use an official chartered accountant, not companies lift rift or Dave your friends mate from down the pub.

also when your return is checked and amended and your charged penalties for incorrectly declaring dividends and not declaring capital gains

'my accountant did it' isn't really a valid excuse.

do some research and hire a good accountant to look over your books before january the 31st so they can make any changes if necessary

xylophone

http://courses.southwales.ac.uk/courses/1224-institute-of-chartered-accountants-in-england-and-wales-icaew

https://www.unbiased.co.uk/