Directors Fees or Dividends – LTD End of year Profits

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peterh

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I have a surplus in my limited company of €10,000 for 2012. Rather than pay corporation tax on this amount I wanted to take it out of the company and pay the associated PAYE PRSI and USI.

Best option???
1. Do I have to submit an amended P35 for 2012
2. or do I pay the tax at source in the current P30
3. or do I take the €10k and pay the tax in my form11 for 2012?
 
Directors fees are tax deductible for CT purposes.

A supplementary P35 is the way to go.
 
Hi

You could amend the P35 but this would be incorrect as the payment was not made in 2012 it was made in 2013. Therefore it needs to be returned on the 2013 P35 and on the current P30.

Nor can you declare directors fees as an accrual in the accounts because it is presumably 6 months after the year end.

The correct option (the safest one) at this point is to create a loss in the accounts of 2013 and carry it back to 2012.

You should get your accountant to deal with this.

Capnhand
 
@capnhand.

I would agree with you if this was ordinary wages but it think that directors fees can be treated differently. I would also agree that the option is available to include the fees in 2013 and create a loss and carry it back but that depends on the OPs income in both years, if they are a higher rate taxpayer in both year then fine, if not there may be a tax loss.

I have never seen directors fees disallowed by Revenue in the year that they were accrued.
The issue I see is that the PAYE/PRSI is owed since 14 January in a case where the remuneration is not paid within 6 months of the year end. So the exposure is to interest.



But your comment "You should get your accountant to deal with this" is most appropriate.
 
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