No salary declared but dividends,

[doreen]

In the first year of accounts we did not draw a salary, we were working full time and this was a hobby, so did not know if we would make any money. come 6 months it appeared we would so we drew a dividend before the NCD rules came in in feb 2004. In aug 2004 we drew another dividend. Total dividends 9000, we paid our daughter 3k as she did the typing and phone calls.
This year we have both resigned our jobs and declaring the 4k rate as paye.
is the tax man likely to kick up a fuss that in the firs tyear we did not draw a salary as shareholders an directors but drew 4500 in dividends?

[King_Maker]

By the use of "we" and "our". I assume you are husband and wife?

If not, you may need to consider whether NMW (National Minimum Wage)Regulations apply.

I assume IR35 does not apply?

If neither of the above apply, then the Inland Revenue cannot dictate the amount of salary, if any, you have to take.