Tax year balls-up

Ah - but that's the point. He _was_ silent on the matter of a "declaration" - but clearly is (and for all we know has been of a little while) keen to pay a dividend. So it is possible he had decided to pay a dividend but is suddenley hesitating because he believes (rightly or wrongly) that the timing of the payment may be a problem.

His post was all about the payment, not about the declaration. No-one else seems to have realised that.

Yes - I think the discussion is precisely about that. But my contention throughout is that the "decision" (which _is_ the "declaration") may have pre-dated 6/4.

Meanwhile, the OP has doubtless toddled off and had the matter sorted! So maybe we should move on too...

Exactly Peter. As I have said before, Martin's answer appears to be to throw confusion where there is none in the hope of deflecting the argument. It might appear to be clever but it is a dangerous game when one might be faced with the new Revenue & Customs Prosecution Office who are looking for nice easy cases to make the headlines!

I say so! The OED definition of declare is "Announce openly or formally (declare war; declare a dividend)" How can the director have announced (either openly or formally) a dividend to himself by only the most fleeting of thoughts, without actually creating any evidence whatsoever, and without actually telling anyone about it at that time? A thought is not an announcement either formally or openly. And, let us not forget that in the case in question the OP has accepted that he had neither decided to declare nor pay a dividend by 11 April 2006.

Putting the potential for criminal prosecution aside (which I think is very real should the OP be persuaded to collude with his adviser in creating false documents which could result in a tax advantage) then would you, Martin, like to take the OP before the General or Special Commissioners for cross examination by Revenue Experts or by Counsel based upon what we know? I certainly would not because I think it would be a waste of his money. He would pretty quickly admit that he didn't know how to declare a dividend and, even if he did, then he had not done it by 5 April, and even if he said he had (despite his posting on the internet on 11 April), he would have no contemporaneous evidence to show for it. OK he may be able to produce minutes etc produced after 11 April purporting to show that a dividend had been declared earlier, but experienced Revenue people would soon sniff that out. I certainly would not rate his chances before the Commissioners.

How can you possibly say that any professional is acting in the best interests of his client in those circumstances? You really are relying on smoke and mirrors Martin.

Er - I somehow don't see RCPO (responsible for prosecuting some of the UK's largest criminal cases involving drug smuggling, money laundering and tax fraud) will get terribly excited about a one-man Ltd Coy getting its paperwork a bit muddled. Normal HMRC inspections / enquiries / settlements regime deal with that kind of thing.

How many OMLCs do you really imagine have all the correct documentation on file supporting divs, or the range of other transactions which make up the minutiae of their every day lives? My guess is well under 25%.

I'm sorry if you think I'm trying to be clever. It's simply that in my business it's vital to ascertain the facts before jumping to conclusions. That is nothing to do with fraud, cooking the books, falsifying documents or what have you.

No dictionary definition overrides the legal definition of what constitutes "declaring a dividend".

I think I've finally realised what's happened. I've only seen the first post from the OP ("barry"?). Could I ask you please to paste and repost his follow up where he evidently talks about declaring (or not) a dividend.

Of course not. That's why I kept saying we don't yet "know" I thought folk were jumping to conclusions. But your repost will clarify that for me.

TIA.

Sorry Martin but here you really are out of touch! Yes, according to their website RCPO do handle some of the largest criminal cases. But they also handle the smaller ones too! In fact they handle all prosecution work on behalf of HMRC, large and small.

Yes, many cases are handled by what is known as the Code 9 procedure which aims to reach a financial settlement, but HMRC and RCPO are also on the lookout for prosecution cases too across the board, not just the larger cases. They have to be seen to be pursuing a proportion of all cases not just large ones, otherwsie smaller cases would know that they are safe from prosecution. There is no guarantee that any particular case will be handled under Code 9.

I accept that the documentation may be deficient in many cases. However where a professional adviser has colluded with his client in producing false documentation the risk of prosecution (or at least investigation with a view to criminal prosecution) is very much greater. As a professional adviser I would not wish to lead (spelt properly this time) my client into any risk whatsoever of prosecution, let alone put myself in the frame. No client is worth that, with due respect, of course, to the OP.

Well please do tell us Martin, what is the legal definition and where is it found?

I think we are all now losing sight of what the OP said, but this is the extract I think you need:

"The point would be if we were to now declare a dividend of say £6,000 per share (2 shares), and date it March 31st 2006, but not pay it until today, 12 April 2006, then the dividend would fall into tax year

If a loan note/IOU dated March 31st 2006 were acceptable as a form of payment of the dividend and not viewed badly by IR

AND

The paperwork would all be dated March 31st 2006, but the money would not be paid until today (or later). The money would not start moving until 2006-2007 tax year."

END

At this point I think that even I am losing the will to live!

He is still talking about *declaring* a dividend on 12 April 2006, not about *having declared* a dividend.

Seems pretty conclusive to me.

###### How come in the course of 14 minutes your postings have switched from plain/text to quoted -printable - thereby supressing the "echo" signs >>> in my OE6?

Well please do tell us Martin, what is the legal definition and where is it found?

###### This is the point I was making previously. "Declaring" the div is what happens at the meeting which makes that decision. In a "one director" (or "one member") Ltd Coy the "meeting" doesn't involve saying anything to anybody. The documenting of what the one person has decided, after the event, is simply minuting the decision that was made. I know it sounds weird, but you'll also know that provision is made not merely for one person to do this alone, but even for the dispensing with AGMs by elective resolutions etc.

###### As a totally irrelevant aside, this all puts me in mind of the frequent morning news reports about some politician or another who "will be announcing later today that..."

I think we are all now losing sight of what the OP said, but this is the extract I think you need:

"The point would be if we were to now declare a dividend of say 6,000 per share (2 shares), and date it March 31st 2006, but not pay it until today, 12 April 2006, then the dividend would fall into tax year

If a loan note/IOU dated March 31st 2006 were acceptable as a form of payment of the dividend and not viewed badly by IR

AND

The paperwork would all be dated March 31st 2006, but the money would not be paid until today (or later). The money would not start moving until 2006-2007 tax year."

END

##### Where did you get that from?!!!!!! I genuinely thought I had seen the OP's only post - my request that you re-post was very much tongue in cheek at best, and grossly sarcastic at worst. This is news to me. My arguments all along have been based entirely on what I believed to be his original and only post - in which the term "declared" never appeared. But evidently this quote is from a follow-up. Which basically means my argument is totally bu**ered.

##### Mind you, I think it was valid in its context

At this point I think that even I am losing the will to live!

##### How do you think I now feel :-(

He is still talking about *declaring* a dividend on 12 April 2006, not about *having declared* a dividend.

##### So he posted this the next day...?! Any chance I can blame Bill Gates or NTL, or shall I just fetch my coat now?

##### Anyway, I concede unreservedly. Sorry we've been at cross purposes all this time - mea culpa. Good chat though - thanks.

Sometimes I will post a message and *I* don't even get a copy downloaded even though I would have expected it to be downloaded from the server I uploaded to. It must be there because other people reply to it.

Really? I've never been aware of not getting posts - though in its inimitable way, NTL goes through phases of sending everything twice - a few days apart :-(

I don't know, Martin, nothing has chaged at this end.

I accept all of that. But the whole point is, because it was a one man meeting (if there was such a meeting) any other evidence that a dividend was or was not 'declared' becomes all the more important to such cynical people as those at HMRC. A one man meeting creates neither evidence nor witnesses so it is incredibly easy to write minutes some time later with no fear of contradiction by those who were there or were recorded as being there. HMRC will therefore look to other evidence, where the date of the meeting is crucial to the amount of tax payable, to show whether or not the decision/declaration was made on that date. Such evidence might be the date of engagement of experienced professionals, the receipt of advice from a professional, relevant correspondence and, yes, a posting on the internet. If any of that evidence casts doubt on whether the dividend was declared when it was supposed to have been declared HMRC will use that to challenge the declaration of the dividend and deny the tax advantage. At the very least they will take it before the Commissioners and, if collusion is involved, they may refer the matter to RCPO.

Out of interest, is there a legal definition of how a dividend is declared anywhere? Or are we relying on normal usage of the words?

Well that gave me the best laugh this year! I did wonder how you knew there was a second posting without seeing it, but I didn't waste too much time trying to figure it out. I shall resist the temptation to look back at your own postings where I seem to remember you saying something several times along the lines of "it is vital that a professional should ascertain the facts before jumping to conclusions" or stronger.

Do you ever give up Martin? I can see why you think that your argument may have had some validity in the context of only the original posting but you could still have led the OP into some difficult times with HMRC and costing him some significant amounts of both accountancy and legal fees, in addition to putting him at risk of a knock from RCPO.

Yes he did. Try using Google Groups (groups.google.co.uk). I have never had any problems with them.

Accepted graciously. It has been fun. Thank you!

########### ...switches on deafening static...###########

######### Huh? What's that?

######### It's funny how Martin only has a problem with your posts...Hello?...Hello?...