The two directors take dividends on a monthly basis, not on an annual basis, so i added them back in, is this correct? I picked up the net profit figure from the last P&L for the year and used that as a starting point.
-- Edited by CountryGirl on Monday 22nd of April 2013 04:12:56 PM
I had client entertainment also, yes, but just didn't put that into the detail... sorry!! The rest was pretty straight forward, its a very small company.
It depends on what you mean by 'profit per accounts'. The starting point for a corporation tax computation would normally be the 'profit before tax' figure. As dividends are paid out of post-tax profits, they wouldn't be added back in the computations.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
How regularly directors takes dividends makes no difference to the way that they are shown in the accounts or how they are treated for corporation tax purposes.
The question is whether the £100,000 profit per accounts figure is after the £20,000 dividends have been deducted:
- If it is, then your accounts should show a profit before tax figure of £120,000 (with dividends being shown in the accounts as a reserves movement). You would end up with the same taxable profit but the computations would show: £120,000 profit before tax + £1,000 depreciation - £10,000 capital allowances = £111,000 taxable profit.
- If it isn't, then the taxable profit will be £91,000.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
