Refused personal loan?!
Discussion
Computer said no!
Director of a company so obviously companies are only taking into my annual sallery,around 5 grand per annum rather than any dividends.
The bank that refused the aplication was Hsbc who I both personally bank with & hold the business account with. They've suggested setting up a regular dividend so their computer can see a higher monthly income & trying again in another few months-it's all a bit frustrating!
Anyone know of any good companies out there who can help?
Director of a company so obviously companies are only taking into my annual sallery,around 5 grand per annum rather than any dividends.
The bank that refused the aplication was Hsbc who I both personally bank with & hold the business account with. They've suggested setting up a regular dividend so their computer can see a higher monthly income & trying again in another few months-it's all a bit frustrating!
Anyone know of any good companies out there who can help?
Eric Mc said:
Watch out with "Regular Dividends".
If they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
but regular dividends are directors loans until the dividends have been voted arnt they?....I know loans to directors are subject to 286 tax or whatever its called these daysIf they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
michael gould said:
Eric Mc said:
Watch out with "Regular Dividends".
If they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
but regular dividends are directors loans until the dividends have been voted arnt they?....I know loans to directors are subject to 286 tax or whatever its called these daysIf they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
Legally, dividends are a distribution of profits.
For HMRC to accept that a dividend is genuinely a dividend and not an illegal advance to a director or a net salary payment, the company should ensure that it has taken all necessary steps to show that it applied the right criteria and procedures to establish that the payment is indeed a genuine dividend
It should produce an interim set of accounts
It should hold a meeting of the directors
It should minute that meeting, particularly the decision to pay a dividend
It should file those minutes
It should produce a dividend voucher supporting the dividend payment
Of couse, in reality, many companies fail to carry out some or all of the above steps so they are actually in a weak position to defend the fact that they consider the payments to be dividends.
Merely waiting until the accountant is finalising the accounts and tidying up the overdrawn directors' loan accounts is not the best way to go about things.
Overdrawn directors Loan balances are subject to Section 419 Corporation Tax and possibly a Benefit in Kind charge on the director(s).
Eric Mc said:
michael gould said:
Eric Mc said:
Watch out with "Regular Dividends".
If they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
but regular dividends are directors loans until the dividends have been voted arnt they?....I know loans to directors are subject to 286 tax or whatever its called these daysIf they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
Legally, dividends are a distribution of profits.
For HMRC to accept that a dividend is genuinely a dividend and not an illegal advance to a director or a net salary payment, the company should ensure that it has taken all necessary steps to show that it applied the right criteria and procedures to establish that the payment is indeed a genuine dividend
It should produce an interim set of accounts
It should hold a meeting of the directors
It should minute that meeting, particularly the decision to pay a dividend
It should file those minutes
It should produce a dividend voucher supporting the dividend payment
Of couse, in reality, many companies fail to carry out some or all of the above steps so they are actually in a weak position to defend the fact that they consider the payments to be dividends.
Merely waiting until the accountant is finalising the accounts and tidying up the overdrawn directors' loan accounts is not the best way to go about things.
Overdrawn directors Loan balances are subject to Section 419 Corporation Tax and possibly a Benefit in Kind charge on the director(s).
Eric Mc said:
michael gould said:
Eric Mc said:
Watch out with "Regular Dividends".
If they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
but regular dividends are directors loans until the dividends have been voted arnt they?....I know loans to directors are subject to 286 tax or whatever its called these daysIf they become too frequent (e.g. - monthly), HMRC CAN use this to argue that the payments are in fact, salary, and they COULD force you to recalculate the PAYE and NI that should have been calculated on the payment amounts.
Legally, dividends are a distribution of profits.
For HMRC to accept that a dividend is genuinely a dividend and not an illegal advance to a director or a net salary payment, the company should ensure that it has taken all necessary steps to show that it applied the right criteria and procedures to establish that the payment is indeed a genuine dividend
It should produce an interim set of accounts
It should hold a meeting of the directors
It should minute that meeting, particularly the decision to pay a dividend
It should file those minutes
It should produce a dividend voucher supporting the dividend payment
Of couse, in reality, many companies fail to carry out some or all of the above steps so they are actually in a weak position to defend the fact that they consider the payments to be dividends.
Merely waiting until the accountant is finalising the accounts and tidying up the overdrawn directors' loan accounts is not the best way to go about things.
Overdrawn directors Loan balances are subject to Section 419 Corporation Tax and possibly a Benefit in Kind charge on the director(s).
cragswinter said:
Computer said no!
Director of a company so obviously companies are only taking into my annual sallery,around 5 grand per annum rather than any dividends.
The bank that refused the aplication was Hsbc who I both personally bank with & hold the business account with. They've suggested setting up a regular dividend so their computer can see a higher monthly income & trying again in another few months-it's all a bit frustrating!
Anyone know of any good companies out there who can help?
(Devils advocate mode on) Director of a company so obviously companies are only taking into my annual sallery,around 5 grand per annum rather than any dividends.
The bank that refused the aplication was Hsbc who I both personally bank with & hold the business account with. They've suggested setting up a regular dividend so their computer can see a higher monthly income & trying again in another few months-it's all a bit frustrating!
Anyone know of any good companies out there who can help?
Guess you have to take the rough with the smooth with you only earning £5k a year.
I can see why HMRC cut up rough with this sort of thing, personally I would not have the brass neck to claim so little as an annual salary that you couldn't even attempt to live on it.
(Devils advocate mode off)
Fair play to you for playing the system, but to my mind you are effectively putting a sign on your back saying to anyone in the HMRC to "investigate me & make my life a misery".
Maybe I'm wrong and everyone claims the same size of salary, please tell me I'm right though surely?
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