Claiming Dividend

[bond.boy203]

Hi,
I have a question ref to claiming a dividend as my earning.

I operate through ltd company as a self employed contractor and been working through out this year. my question is if I defer my dividends for next year and declare next year when my extension is due would that be a problem.

To make it clear here is an example :
Company earned between Jan-2012 to Dec-2012 50K but declared only 10K sa salary
If I my company dont have any earning in 2013 for some xyz reason and I declare 40K as dividend through the year 2013 and apply for an extension in dec 2013, would home office have a problem with me claiming dividend as my earning in 2013 ?

has anyone had experience in such scenarios before ?

p.s : The numbers and situation is just imaginary. Just want to make sure I cover myself for the worst when I apply for extension next year..

If any seniors could advise on this, would be really helpful...

[jeno]

Hey Bond,

You can't do like that. Ho will be expecting from you that you have econmically active in last 12 months. For example, if you earn in YR 2000 and retained the profit for 10 years and you can't claim in YR 2010 that you're economically active in 2010.

[tier1Reading]

Bond, Its perfectly legal to declare dividend as you have written.

http://www.contracteye.co.uk/dividends-how-often.shtml

If you don't want to physically pay yourself a dividend at a set point in time, but you have some of your basic rate tax band remaining and the company has sufficient profits, you can declare a dividend with the intention of taking it at a later date. This ensures the dividend falls into a certain tax year and allows you to fully utilise your tax allowances year on year.

[gaurav76.5]

on the dividend voucher just declare the dividend and payment date..but be careful when filing company returns if you haven't drawn dividend you may be liable to pay corporation tax... your accountant is best person to speak to about this..

[shargaur]

Agreed with gaurav. The basic nature of dividend is that there should be enough money in company to pay your dividend. Its logical and legal.

But the point UKBA considers is not the income from interest or rent. They consider income from service you provide.

Thanks,
Gaurav