Anybody familiar with the UK accounting law, would you please be able to advice if company co-directors’ respective annual salaries could be paid from the sales of the business revenue?
My sister and her husband are the joint directors of a company within which a sandwich bar traded for two years. First company account files (ending Jul 2015) reported £6K of loss .The business (including the premises’ lease, goodwill, equipment and fittings) was sold on February 2017 (for about £44K) and for tax efficiency the two directors are seeking to collect their basic salaries (£11K) for the last accounting year from the revenue of the business sales (the day to day trading of the business was not profitable and therefore they couldn’t pay themselves from daily catering sales profits). We have been advised that it might not be possible which is counter-intuitive as the reward of the hard work of the directors could at least be the sum for the sales of the business. Neither of the directors have taken a penny of payment over the two year trading period.
Please could we have some hope!
S
My sister and her husband are the joint directors of a company within which a sandwich bar traded for two years. First company account files (ending Jul 2015) reported £6K of loss .The business (including the premises’ lease, goodwill, equipment and fittings) was sold on February 2017 (for about £44K) and for tax efficiency the two directors are seeking to collect their basic salaries (£11K) for the last accounting year from the revenue of the business sales (the day to day trading of the business was not profitable and therefore they couldn’t pay themselves from daily catering sales profits). We have been advised that it might not be possible which is counter-intuitive as the reward of the hard work of the directors could at least be the sum for the sales of the business. Neither of the directors have taken a penny of payment over the two year trading period.
Please could we have some hope!
S