Morning all - sorry I just could not deal with this last night! It sent me into an absolute rage (on top of what is happening in the US) and I had to go into a dark corner with a flannel over my head.Yep. Sorry to keep tagging @Bumbear but she calculated over £100k had been taken in dividends, the fact her accounts are showing a deficit suggests she actually over took dividends too which is v frowned upon. She may only take £23k p/a as a PAYE style salary but she’s got a lot more to play with
What I had calculated from the 2018/19 accounts is that around £104k had been removed from the business bank account (after I had allowed £25k for the pay / tax of the second employee from the business, whom we assume is Caroline). We cannot tell from the accounts exactly how it was paid out - these are micro accounts so they don't show a director's dividend amount on the paperwork.
If she is saying she doesn't pay herself a dividend, then she could have taken the whole lot out potentially as PAYE (taxed at source in the business bank account) of which she then allocated £23k to live on (her version of the living wage), and saved the rest into a savings personal account.
Doing it via PAYE she would take home after tax around £68k. After paying herself £23k that leaves £45k which has gone somewhere.
It's perfectly possible she could have done this, but not what an accountant would recommend, as it's less tax efficient overall. I do have some friends who are contractors but choose to pay themselves via PAYE (after charging clients a day rate) because they are worried about owing tax on dividends etc and this way they know they've paid tax in full up front. We know Jack has said she struggles with managing her money, so maybe she also is concerned about this (in that case don't empty out the business bank account to the point where you can't pay your corporation tax bill)!
She keeps referring to money put aside for the forever house so it could be that the remaining, larger sum (£45k) could be squirrelled away in a personal, savings account for the deposit.
What doesn't make sense though is the rental cost of the bungalow (approx £2k per month) which she is now paying by herself - that doesn't add up on £23k a year to live on. And that's before bills and living expenses, unless she's getting a significant discount on the rental cost.
Anyway, HTH, got to dash to work. Love to all. xxx
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) so nothing is guaranteed in any year, let alone this one.)
, but isn’t fluent. She won’t text her friends with better Arabic the screenshots for forensic analysis because ‘that would be weird, mum’.