GAK gone bust...

[MacDaddy]

On 05/04/2025 at 02:17, WalMan said:

£187k director fees

 

Wonder how many Directors they had?

[Misdee]

Prior to GAK and BAX going bust, in recent months I've noticed a renewed vigour in the marketing strategy of certain UK retailers. They're trying to reach out through social media, YouTube ect, and create a sense of community and to enthuse their customers.

 

Maybe these shops are experiencing similar pressures as GAK and are trying to be proactive. Good luck to them anyhow, I hope they prosper. The more shops the better, as far I am concerned.

[BabyBlueSound]

Yep, I am trying to do my part and avoid ordering anything from Amazon and "friends", even if that would mean saving 10-20 quids... takes only a few minutes to browse alternative options.

[WalMan]

22 hours ago, MacDaddy said:

 

Wonder how many Directors they had?

4, and there were no dividends paid so they weren't stripping it that way

[Terry M.]

2 hours ago, WalMan said:

4, and there were no dividends paid so they weren't stripping it that way

I always had really pleasant exchanges with Roy Chudobskyi there. He was great at knocking a few quid off list prices for me especially on used items. Was he on director level? I'll miss dealing with him. 

[Stub Mandrel]

2 hours ago, WalMan said:

4, and there were no dividends paid so they weren't stripping it that way

 

Dividends should be to distribute profits... sadly if a company is large enough it seems they can be used to distribute borrowed income.

[Wombat]

So you are supplied by Thames Water too then?

[PainInTheBass]

The latest update in the local newspaper says people were spotted inside packing stock into boxes. I guess they didn't find a buyer then.

 

https://www.theargus.co.uk/news/25065145.everything-know-far-closure-gak-brighton/

[rmorris]

On 09/04/2025 at 17:34, WalMan said:

4, and there were no dividends paid so they weren't stripping it that way

 

Not understanding that remark. Dividends are paid to shareholders in a company. Who may, or may not be, Directors (as in Officers of the Company).

[Stub Mandrel]

3 hours ago, rmorris said:

 

Not understanding that remark. Dividends are paid to shareholders in a company. Who may, or may not be, Directors (as in Officers of the Company).

 

If it's a private limited company the Directors own the shares, and they are not publicly traded.

[rmorris]

7 hours ago, Stub Mandrel said:

 

If it's a private limited company the Directors own the shares, and they are not publicly traded.

 

In general yes. But there is no statutory requirement for a director to be a shareholder or vice-versa. Although it might be a requirement set by the company itself.

I'm very aware that "dodgy accounting" is a thing. But legally dividends must be paid only from available profits which limits scope. OTOH there are Directors Loans as a financial vehicle...

[deebee]

12 hours ago, Stub Mandrel said:

 

If it's a private limited company the Directors own the shares, and they are not publicly traded.

Not necessarily.

 

Shareholders and directors are completely different things, and it doesn't need to be a PLC to have shareholders who aren't directors (and vice versa).

[WalMan]

21 hours ago, rmorris said:

 

Not understanding that remark. Dividends are paid to shareholders in a company. Who may, or may not be, Directors (as in Officers of the Company).

Only that they were not taking everything out, which is of course their right in a private company, as might happen in other circumstances. That said there were no profits to take anyway, but there was a couple of mil in reserves IIRC

[rmorris]

44 minutes ago, WalMan said:

Only that they were not taking everything out, which is of course their right in a private company, as might happen in other circumstances. That said there were no profits to take anyway, but there was a couple of mil in reserves IIRC

 

There will be creditors. To withdraw assets / reserves from a company in such circumstances would be illegal.

[WalMan]

1 hour ago, rmorris said:

 

There will be creditors. To withdraw assets / reserves from a company in such circumstances would be illegal.

I meant in recent years leading up to the end not now

[prowla]

Dividends are paid on profits.

Salaries are a pre-profit cost.

[Steve Browning]

1 hour ago, prowla said:

Dividends are paid on profits.

Salaries are a pre-profit cost.

And taxed at a lower percentage. 

[prowla]

1 hour ago, Steve Browning said:

And taxed at a lower percentage. 

Is that good or bad?

[chriswareham]

13 minutes ago, prowla said:

Is that good or bad?

 

It can be bad. The former owner of the company I work for would maximise profit so he could then pay himself the biggest dividend possible and pay the least tax, sacrificing the ability to invest and grow the business. As the majority shareholder he did this against the wishes of the other shareholders (who were also founders and worked at the business). Thankfully he wanted to sell the business at the end of the COVID shutdown and our new owners are much more pragmatic.

[rmorris]

38 minutes ago, prowla said:

Is that good or bad?

 

Depends on the specific circumstances. There is an element of encouraging risk taking. But it can be abused in terms of trading realistic salary income for dividend income to artificially reduce income tax. It can, of course, backfire. Remember the outcry when people who paid themselves largely through dividends were not eligible for furlough support etc during COVID-19 restrictions.

[Steve Browning]

8 hours ago, prowla said:

Is that good or bad?

Depends on your views on tax avoidance. Personally I don't buy the risk taking argument. 

 

Like all avoidance, it's perfectly legal.

[Burns-bass]

9 minutes ago, Steve Browning said:

Depends on your views on tax avoidance. Personally I don't buy the risk taking argument. 

 

Like all avoidance, it's perfectly legal.

We’ve had this discussion before. It’s not necessarily about risk, but about flexibility too.

 

Plus dividends are taxed after corporation tax has been paid.

 

The reality is that I pay similar amounts to of tax on my Ltd company earnings as I do on my private work (declared on my self assessment tax).

 

The overwhelming majority of small Ltd shareholders who are owners will pay pretty much the same tax as PAYE employees (with no holiday pay, sick pay or other associated benefits).

 

GAK is more likely to have been the victim of changing circumstance bit corporate malfeasance, but we can’t say for sure.

Edited yesterday at 06:44 by Burns-bass

[prowla]

18 minutes ago, Steve Browning said:

Depends on your views on tax avoidance. Personally I don't buy the risk taking argument. 

 

Like all avoidance, it's perfectly legal.

Well, the risk-taking, or just having the gumption to run a business and create wealth has to be worth something. 

But how does a company which is losing money pay dividends?

[Burns-bass]

16 minutes ago, prowla said:

Well, the risk-taking, or just having the gumption to run a business and create wealth has to be worth something. 

But how does a company which is losing money pay dividends?

Steve is going to view this through the lens of a taxman. Owners and employers jointly create wealth, which is true. 
 

The argument for lower taxes on business people is that it encourages them to invest and take risks. But taxes aren’t lower for most small businesses.

 

The reality is that dividend reliefs are pretty much gone and most Ltd company directors (like me) pay similar rates of tax to PAYE employees. 

Edited yesterday at 07:12 by Burns-bass

[prowla]

41 minutes ago, Burns-bass said:

Steve is going to view this through the lens of a taxman. Owners and employers jointly create wealth, which is true. 
 

The argument for lower taxes on business people is that it encourages them to invest and take risks. But taxes aren’t lower for most small businesses.

 

The reality is that dividend reliefs are pretty much gone and most Ltd company directors (like me) pay similar rates of tax to PAYE employees. 

Yep - I'm with you there.