How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Sam Your Own Question
Sam, Accountant
Category: Tax
Satisfied Customers: 14195
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Type Your Tax Question Here...
Sam is online now

question on dividends. I am the 100% share holder

This answer was rated:

question on dividends.
I am the 100% share holder and only director of the company.
The company is currently dormant and I work part time on closing it down / stat accounts etc as have a full time PAYE job elsewhere.
for the work I have completed since company became dromant i have taken from the company £6,000 over past 5 months for my work.
what can this money be recorded as for HMRC purposes?
a) can it be considered my fees for the work
b) does it have to be recorded as a dividend payment to me?
Hi James
Thanks for your question
No - as you are a diercetor of the company it has to be taken as salary or dividends - but can only count as dividend if this has been recorded as being the case - and as you clearly undertook work in the company to earn this money - then Dividends are payable out of post-corporation tax profits. The levels and timings of dividend are set by the directors and are paid to shareholders according to the number of shares they hold. Shareholders need not be directors; and vice versa. Dividends should be documented by way of a dividend voucher and board minute.
If you have all of this covered then you can pay this as a dividend
But if you are continuing to trade (having earned £6000) then it cannot be dormant - so this too needs rectifying with HMRC
Sam and other Tax Specialists are ready to help you