my accountant says that dividends should be shown as 90% of what is actually paid on P&L for compianes house?
United Kingdom - 5 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
okay
Answer 2 :
Michael, the answer is the same as when you asked this question before. Your accountant is wrong or you have misunderstood his advice. The correct accounting treatment is that dividends in the P&L are the same as the dividends actually paid. Tax treatment would be a different question with a more complicated answer.
Answer 3 :
The only reason for doing so is either :- 1) To evade Tax 2) To cover up Fraud elsewhere in the cash flow
Answer 4 :
The reason behind this is because a 10% tax credit is applied to the dividend, so if you have drawn £10k as a dividend the amount that goes on your Individual Self Assessment is 1/9 x £10k (=£11,111). The company would show £10k in its accounts.
Answer 5 :
I'm with JC on this. The answers to the previous question more than covered the matter.
Read more other entries :
