Director of a Ltd Company

Potbellypig

Darksparkle wrote: »

You and the company are two different things. However if you have money in your personal account that comes from the company that you haven't declared or you are using the company account to pay for personal items and not declaring it as a benefit then they are right to question it.

Thanks. That's the bit that is still legally unclear in my head.

UKSBD wrote: »

If you are a genuine employee (with contract and on Paye) as well as a Director, I say put a claim in as you never know what may happen to the business throughout the year and may find you can't draw as big a dividend as you hoped to.

Always allow for the fact you might have an overpayment though.

in 2015/16 I received about £6k in Child tax credits but took a Dividend in March 2016 resulting in a £6k overpayment.

2016/2017 I also received about £6k in tax credits
Due to a number of circumstances the company can't afford to pay me a dividend this year so I have no overpayment.

In my opinion it is best to receive a tax credit and pay it back if you get a dividend, rather than not claim it and then find at the end of the year the company can't afford to pay you a dividend.

I don't have a contract but I'm a PAYE to the company, with payslips, P60 etc that my accountant does. My partner is a PAYE to the company too (albeit she only does a small amount of work a year).

Thanks for sharing your experiences though

Darksparkle

It would probably be easier to help if you could be clear as honest about what you are doing with the company money.

Are you using the company bank account for personal items?

Or are you taking money out of the company that you aren't declaring as employment income or dividends?

theEnd

Also, you can't leave retained earnings in a Ltd company that you have full control of, just to claim benefits.

I'm sure someone on here was in big trouble for doing so.

UKSBD

You are best having a written statement of employment for yourself and your wife stipulating hours worked and rate of pay.


You don't necessarily need this as a Director but you can technically be a Director and employee at same time, so it makes sense to have one.


Ideally you should pay yourself above minimum wage, your wife you should be paid above minimum wage.


If your Profit and Loss (amount available for dividend) is any amount that they consider you should draw they may consider the fact you are not taking it a deliberate deprivation of income.


No idea what figure they would consider though.

BJV

Ok

My advice, DO NOT FIDDLE IT. You will get caught.
Do not think that HMRC will not find out. They will
As you are a limited company you will have to report accounts, it will show dividends. Back to point one they will find out. Leaving a massive cash surplus again back to point one.

HMRC are no-ones fool so dont try and kid them or manipulate the system they will find out.

I used to get fed up paying tax on tax on tax but now well it is a necessary evil. Every time I have to pay it I think well hey I had to make it to be able to pay it.

Be up front and do not hide anything don't forget they can claim back money years after. They can in effect close you down. Do not risk it.

Potbellypig

Thanks for all your advice. After consideration of all avenues, I'm going to leave claiming CTC.

My Accountant has told me that he'll be able to offset the cost of childcare though, so all's well that ends well.

Really appreciate sharing your comments/experiences though.

xylophone

Are you contributing to a pension or is your company contributing on your behalf?

http://www.entitledto.co.uk/help/tax-credit-pension-contributions

What is your wife's pension situation? Presumably there will be a scheme at her new place of work.

Have you both checked on your state pension situation?

https://yourstatepension.campaign.gov.uk/?utm_source=Mail-Online&utm_medium=Partnership&utm_campaign=GTKY