UK Taking a salary from retained profit.

[Techy101]

Hi. I have quite a bit of retained profit in my company account. I haven't worked this year - but have continued to pay myself a salary and dividends from the retained profit of previous years work.
I have been told that this is risky from a HMRC perspective but I can't find out why?
Any idea why this would be a risk? Obviously the company will not make any profit this year but there's still funding there to pay myself whilst I'm "sat on the bench".

 

[Julia Satin]

I don't see any risk here either. You salary will make a loss for the period in which you were not working. That loss will reduce available retained profit. As long as you don't take out more than you have in retained profit you should be fine.
Thus, total annual salary + dividend should be less than your Retained profits at the beginning of the year.
Also bear in mind that when you take more than £5,000 of dividends there will be more tax to pay.

 

[hirschcogmail.com]

Hi

There is no problem taking a salary.

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