Step 2: To enter in a payment against the invoice or backdate a payment, see the following article and change the "received date" to a date in the past.
Limited company contractors who have adopted a strategy of declaring dividends prior to April 2016 but who have not yet paid them out can still attract the dividend tax rates for tax year 2015/16, providing they can provide sufficient evidence to prove it was declared and payable before 6 April 2016.
"It's more of a disadvantage because you're leaving your personal money in the hands of the company," Strike adds.
"Therefore it is as at risk to commercial issues as any other company money would be." “When a company declares a dividend, the director makes a resolution which determines that a sum of money will be paid on a particular date,” Strike explains.
“The right thing is to consider your financial needs and create an income plan early in the tax year, and then to reassess that prior to 6 April, making any changes in a timely way.
This would negate even the consideration to backdate dividends as you would have made any necessary transactions in time.” Whilst it is quite commonplace for directors of contracting companies to declare a dividend and leave the money within the company, Strike points out that there are no benefits to doing so unless you intend to allow the company to invest those funds.
The information below was written by the Low Incomes Tax Reform Group.
Standard backdating An initial claim can be backdated if the circumstances entitling the person to tax credits have subsisted for the period of the backdating.
When setting up a loan or mortgage account for the first time in Microsoft Money, the earliest date that you can use for entering transaction informationis the start of the current calendar year.
Part of the reason for this, is that the further you go back, the harder it is to get the calculations correct (even though they won't be completely right anyway, as banks and other lenders may work out interest payments slightly differently to those that Microsoft Money does).
In certain circumstances tax credits claims can be backdated.