Peter Rayney uses a case study to look at an owner-manager’s cash extraction plans during Covid-19.
On a dark December morning, Monty Marshtitch was staring depressingly at ‘his’ company’s management accounts for November 2020. Monty was the 100% shareholder of Barnsdale Garden Centres Ltd, which operated two garden centres. The business had been ravaged by Covid-19 and whilst almost all the staff has been furloughed for several months, it was still likely to make a trading loss of around £80,000 for the year ended 31 December 2020.
A dismal year
He rang up his accountant, Carol Greenwood; “Hi Carol, the figures this year are pretty dismal due to Covid – you will remember that we had to close from March to June this year. I was wondering how much dividend I should take this year? I do not think I can justify ‘my
