1 As a director - how often and when I can get dividents?
You can't take dividends just because you're a Director, you must also be a shareholder. Dividends are paid to shareholders from profit available after Corporation tax has been deducted. (known as retained profit)
2 When and how pay taxes on it?
After April this year you will be able to take 5k a year tax free. The rest will be taxed at 7.5% up to 27k, at which point you will be taxed at a higher rate.
3 Do I need to send self assessment each year and pay taxed on it if divdents are only one source of my income?
From April this year you will need to complete a self assessment if you take more than 5k. If HMRC ask you to send a SA then you are required to do so, even if dividends are less than 5k
4 Is there any flat or maximum amount of dividents I can take out from companies bank acc?
Dividends can only be taken from retained profit. If you take a dividend and don't have retained profit to cover it, you will be liable to a 25% tax charge. Dividends can be taken at any time but with the caveat that you know the profit is there to cover it (1) There is no flat rate or maximum amount but be careful not to take the same amount consistently every month, as HMRC could deem these to be PAYE instead.
5 Drawings vs dividents
Drawings are not available to Directors, only Sole Traders.
Hi Natalia
I would strongly suggest you engage an accountant, it will likely save you more than it costs. Get the above wrong and it could cost you a small fortune.
(1) Many Ltd Companies end up going bust because they take more dividends than they have retained profit, then can't pay HMRC.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi Natalia
Is this for your bookkeeping business? I agree with John and if you can find a friendly one who doesnt mind teaching you about what they are doing whilst doing it with your own business then you might be able to do the year two, with them just overviewing it for you. Care as John says, the rules are changing soon.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I am doing a very basic bookkeeping and payroll for LTD's and sole traders. However I am also a director and shareholder for my own company and I was a bit confused with that. Finally most of my questions are the same as I assumed.
I wonder if I can do a little bit more than basic bookkeeping for my clients, I am AAT qualified but not everything was include in my course. I am reading lots of books, forums, making a calls to hmrc every day! Wants to try do my own year end and annual accounts first, so then I can see how complicated is that.
-- Edited by NATALIA on Friday 29th of January 2016 03:49:40 PM
I wasn't aware you were a bookkeeper when I posted my reply, so the engage an accountant may not be necessary (it may still be though)
I would suggest that you have a go yourself as soon as you can after year end, without actually submitting anything, so you can see how easy you find it. (If you've completed AAT, the knowledge should be there exam wise) If you struggle with it, it still gives you plenty of time to get an accountant on board. Don't be afraid to ask questions on here.
I did my first one more or less by accident, when someone I knew asked me if I could. It wasn't easy and it took a bit of trial and error, but I got there in the end. I still won't attempt all but the basic ones, but hope to gain more knowledge as I go through levels 3 and 4 of AAT back end of this year and all next year.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
