Gross Dividend vs Net Dividend

brajen · Post by **brajen** » Sat Dec 29, 2012 9:25 pm

Hi Friends,

I'm applying for my Tier 1 extension salary + Dividend from the company. Could you please clarify whether I can claim point on Net dividend or Gross Dividend?

Thanks in advance.

Yash001 · Post by **Yash001** » Sat Dec 29, 2012 10:44 pm

Gross Dividend..Your accountant should advise you on this

brajen · Post by **brajen** » Sat Dec 29, 2012 11:00 pm

Yash001 wrote:Gross Dividend..Your accountant should advise you on this

Thanks mate. Yes, My accountant said it's a Net Dividend . but my friend said his accountant says Gross. Confused??
Pls any senior Member, any idea ?

tier1_aspirant123 · Post by **tier1_aspirant123** » Sat Dec 29, 2012 11:44 pm

Its gross... i have used gross dividend for my successful application...

brajen · Post by **brajen** » Sun Dec 30, 2012 9:54 am

tier1_aspirant123 wrote:Its gross... i have used gross dividend for my successful application...

Thank you very much aspirant. So you say that, for example, if I receive £1000 into my bank account as a dividend, then £1000/.9 = 1111.11 (Gross). and my gross salary £1500, then I declare my income for the points claim as £1111.11+1500=£2611.11. Is this right way?.

and also, I take dividend every month and some time 02 /03 months interval. is this OK? or is there are any rules relating to drawing dividend? Please clarify ?

goldfish · Post by **goldfish** » Sun Dec 30, 2012 4:31 pm

Gross dividends.

I included a letter from my accountant showing gross salary, net salary, gross dividend, net dividend. My accountant calculated the gross amounts. The accountant's letter showed how the gross amounts corresponded with the net amounts (because my bank statements showed net amounts being paid in).

I was also applying under HSMP (JR) so didn't have a specific earning threshold to meet.

You don't have to pay dividends regularly. I pay mine once a year (plus sometimes midyear).

brajen · Post by **brajen** » Sun Dec 30, 2012 9:38 pm

goldfish wrote:Gross dividends.

I included a letter from my accountant showing gross salary, net salary, gross dividend, net dividend. My accountant calculated the gross amounts. The accountant's letter showed how the gross amounts corresponded with the net amounts (because my bank statements showed net amounts being paid in).

I was also applying under HSMP (JR) so didn't have a specific earning threshold to meet.

You don't have to pay dividends regularly. I pay mine once a year (plus sometimes midyear).

Thank you Goldfish. It's really very useful information. My accountant advised me that I can take dividend end of every month like salary! or any time I want?. Is that wrong advise then?. Pls any senior members calarify on this?

goodies901 · Post by **goodies901** » Mon Dec 31, 2012 1:12 am

You can take dividend from the company anytime you want as long as there is a declared dividend available. Different accountants advise differently as to the timing but much better if you don't do it each month...it then becomes more of a salary than a dividend in the eyes of the taxman...but no relation to visa applications.

brajen · Post by **brajen** » Mon Dec 31, 2012 9:20 am

goodies901 wrote:You can take dividend from the company anytime you want as long as there is a declared dividend available. Different accountants advise differently as to the timing but much better if you don't do it each month...it then becomes more of a salary than a dividend in the eyes of the taxman...but no relation to visa applications.

Thanks Goodies. Superb!!!. Very good point. Please also clear what do you mean by the declared dividend??. Thanks

goldfish · Post by **goldfish** » Wed Jan 02, 2013 3:49 pm

brajen is right. If you use would like to use the exact words you would "pay salary" and "declare dividends".

anishmathw · Post by **anishmathw** » Tue Jan 22, 2013 3:15 pm

If I get an income of 3000 to my LTD company, is it legit to declare a dividend of 2400( net dividend) as an example ?

canon123 · Post by **canon123** » Wed Jan 23, 2013 3:31 pm

If you are earning 3000 after VAT.

Say from that if you take gross salary as 600 and monthly expenses as 100, Accountancy fees as 100.

Then remaining amount would be: 2200 (Profits to the company)
Corporation tax: 462
Gross Dividends = Profits - Corporation tax = 1738
Tax credit on Gross Dividends would be: 173.8
Net Dividends: 1564.2

So for visa purposes: Gross Salary + Gross Dividends: 600+1738 = 2338
which can be shown as your gross earnings

Hope this helps!!

King_tier1 · Post by **King_tier1** » Wed Feb 06, 2013 3:45 pm

canon123 wrote:If you are earning 3000 after VAT.

Say from that if you take gross salary as 600 and monthly expenses as 100, Accountancy fees as 100.

Then remaining amount would be: 2200 (Profits to the company)
Corporation tax: 462
Gross Dividends = Profits - Corporation tax = 1738
Tax credit on Gross Dividends would be: 173.8
Net Dividends: 1564.2

So for visa purposes: Gross Salary + Gross Dividends: 600+1738 = 2338
which can be shown as your gross earnings

Hope this helps!!

Please help me with this, sorry if this questions is confusing or been asked earlier by others..
As per your example -if I got paid £3000 on an invoice( 20% VAT charge included). In a situation no expenses involved in business, If I take net dividend of £2400 ( 20% paid for CT) in to my personal bank account. I dont take salary from my business. How much I can claim as Gross Dividend for Tier 1 Earnings, Is that £2640 ?

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Gross Dividend vs Net Dividend

Gross Dividend vs Net Dividend