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to think that dividends included in the calculation for student loans

(69 Posts)
ginplease83 Wed 10-Aug-16 16:40:16

is actually quite basic.

Just had a £5k tax bill from the HMRC the week before I go on maternity leave (great). I draw dividends from my Ltd company as well as a small salary and my accountant has confessed that he didn't realise that you have to include dividend payments when you calculate how much student loan you need to repay.

I found out this from the student loan website- AIBU that the accountant is pretty stupid to not know this?

PS. I am not disputing i have to pay it. But i would have liked some notice!!!

YelloDraw Wed 10-Aug-16 16:43:34

Meh, dividends in lieu of salary from your own ltd co are basically tax avoidance so I can't get too upset for you.

99GBPChargeToUseMyPostsJournos Wed 10-Aug-16 16:45:51

Well aren't you a charmer.

Student loan dedications are through payroll as standard.

I did payroll for years, and didn't know this. I have accounting qualifications, and this was not covered.

There is always a first time to find out new information. Not knowing everything dies not make someone stupid.

YABU and unpleasant. If you knew, then maybe you should have made your accountant aware.

Oh, and 5k student loan deduction means you must be on a very good wage so although it is unplanned for which is annoying, I'm sure you'll cope.

CrossfireHurricane Wed 10-Aug-16 16:51:04

I cannot believe the flak the OP is getting!!
Of course an ACCOUNTANT should know about deductions.
And if something pisses me off more than accounts clerks/book keepers putting themselves on a level pegging with qualified accountants I can't think of itangry

Egosumquisum Wed 10-Aug-16 16:51:15

Message withdrawn at poster's request.

Egosumquisum Wed 10-Aug-16 16:52:47

Message withdrawn at poster's request.

panegyricS1 Wed 10-Aug-16 16:55:11

That's pretty basic stuff. I hope your affairs never become genuinely complicated! That accountant won't cope. Is it a proper accountant, or one of those pseudo "tax assist" outfits?

Egosumquisum Wed 10-Aug-16 16:58:30

Message withdrawn at poster's request.

ginplease83 Wed 10-Aug-16 17:00:57

actually it's over 3 years and I had no idea until I got a HMRC demand this morning. I've relied on my accountant to guide me on the tax side of my business.

ginplease83 Wed 10-Aug-16 17:01:47

Ego- yup I knew about that. It's inevitable it was all going to change tbh

ginplease83 Wed 10-Aug-16 17:03:44

I'm going to change accountants I think.

HaPPy8 Wed 10-Aug-16 17:05:30

I dont get the issue - if you were due the dividends what was the accountant meant to do?

ginplease83 Wed 10-Aug-16 17:07:34

Ego- he thought the calculation was only on salary and 'earned income'.

Egosumquisum Wed 10-Aug-16 17:09:01

Message withdrawn at poster's request.

Egosumquisum Wed 10-Aug-16 17:09:43

Message withdrawn at poster's request.

ginplease83 Wed 10-Aug-16 17:11:00

Happy8- I got the dividends and my accountant has done my self assessment and only requested that I pay student loan contributions on my salary and not dividends. I didn't question it trusting that he knew what he was doing. A bill arrived today saying I owe £5k including interest for the past 3 years. I rang the accountant who said that he 'didn't realise' you pay student loan on your dividends. On googling this, it's very clear that you do. I'm wondering if perhaps this accountant hasn't got a basic handle on things and perhaps I should vote with my feet. I have no problem paying this amount but would rather have notice

HaPPy8 Wed 10-Aug-16 17:11:55

Oh i see thanks Ego. I dont think you are being unreasonable then, id be annoyed too.

Egosumquisum Wed 10-Aug-16 17:14:10

Message withdrawn at poster's request.

ginplease83 Wed 10-Aug-16 17:20:48

No. Fair enough if I owe it then it needs to be paid. Thought an accountant would know this though. Going to save myself £400 and do it myself next year.

PeachBellini123 Wed 10-Aug-16 17:22:40

I'd get a better accountant. Why are you paying them otherwise?

Discobabe Wed 10-Aug-16 17:29:04

If it's your accountants fault tell them to cough up.

HeCantBeSerious Wed 10-Aug-16 17:35:16

Just out of interest - do you know about the dividend tax changes this year 2016 - 2017?

Basically, dividends above £5000 are going to be taxed at 20 / 40%.

No they aren't.

Chippednailvarnishing Wed 10-Aug-16 17:38:05

I'd be asking the accountant to pay the interest...

99GBPChargeToUseMyPostsJournos Wed 10-Aug-16 17:46:05

Crossfire, have I pissed you off? Shame.

Out of curiosity, does a first class honours degree in accountancy qualify someone as an accounts clerk or as a bookkeeper? Just for future reference you understand.

I don't think it's acceptable to call someone stupid based on what happened. Yes, it's annoying. But personal insults are not helpful and so I responded the way I did.

ginplease83 Wed 10-Aug-16 17:48:04

Chipped- I'm considering asking him to refund the cost of the returns.

I'm going to vote with my feet and leave.

Actually those of you citing tax avoidance- if DH and I took salaries representing the market value of our professions (£100k plus each) then the business would go under as we'd be in minus figures so the government wouldn't get any corporation tax and I wouldn't have the flexibility to reinvest in the business and employ others by paying myself less if I need to so it all swings and roundabouts really.

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