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Compilation - Dividends and Directors Loan Accounts

Price: £75.00

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Dividends and Directors Loan Accounts

Tax Guide

It has been suggested a dividend without the correct supporting minutes etc will not only be in breach of the Companies Acts but also unacceptable to HM Revenue and therefore it is essential dividend paperwork is correctly dealt with.  This is particularly the case following HM Revenue's success in the Vardy Properties Tax Tribunal case which found that a purported dividend paid was unlawful in that it failed to follow the relevant requirements.  The guide sets out in detail Companies Act 2006 procedures and also considers the implications of illegal dividends [including recent case law], alternative methods of payment, eg cheque, loan account, the distinction between interim and final dividends, plus includes example minutes, dividend waiver form etc.  It also reviews situations where HM Revenue may contend dividends should be taxed as remuneration and subject to PAYE tax and National Insurance contributions, including commentary on the recent case of P A Holdings Limited.

Pages: 30

Author: DTE Tax


Client Advisory Letter

Recent developments indicate that HM Revenue & Customs are taking steps to limit the effectiveness of the dividend strategy (IR35, use of the settlements legislation, changes relative to managed service companies, anti avoidance legislation in respect of alphabet share arrangements and their recent success in the Court of Appeal case of P.A. Holdings Limited etc etc).  Ministers have confirmed the Government's desire to charge PAYE and National Insurance contributions in respect of "the employment reward - the passing of value to an employee in return for the employee's labour".  Whether this applies to the payment of a small salary and a large dividend typical in the owner managed business situation is not known and to date there has been no evidence that the existing legislation is to be applied in these circumstances but some believe that this could change.  Our letter is designed to advise clients of the background position, recent events and draw to their attention possible future developments.  Some may take action to increase salaries as a result of the letter and no doubt others will not.  However, the letter should provide a valuable resource for every practice in advising clients of the relevant issues and helping to protect it from possible future complaints/claims if a more widespread attack on dividends does indeed occur.

Pages: 2

Author: DTE Tax

Client Advisory Letter

A basic outline of what is a Director's Loan Account, how they work plus the tax implications of credit balances and overdrawn accounts including Finance Act 2013 Anti-Avoidance provisions, the importance of paying dividends correctly and an outline of possible future developments.

Pages: 2

Author: DTE Tax

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