Dividend paperwork

If you have your own Limited company where you have regularly paid yourself a low salary and then extracted extra funds via dividends, you should be aware of the following:

  • H M Revenue and Customs is becoming increasingly interested in this area since it leads to considerable amounts of Tax and National Insurance not being paid
  • To ensure that you do not have a problem with H M Revenue and Customs, you must comply with the Companies Act 2006. Specifically, the company should:
  1. Be aware and understand the difference between interim and final dividends;
  2. Produce dividend minutes at the time the dividend is approved; and
  3. Produce dividend vouchers when the dividend is paid
  • You should ensure the correct amounts are entered onto your personal self-assessment tax return 

In addition to the above, you should be aware that there is tax legislation whereby you could even be taxed on your spouse’s dividends

See our article on this issue    Dividends and PAYE – What you should know             If you have any concerns, please contact us