Taking Dividends

A Dividend Declaration Form/voucher with which we supply to our clients should he held on your records to cover all dividends paid out by your company.

This is really important in case you are investigated by HMRC. The absence of this documentation may well encourage a Tax Inspector to class the receipts not covered by the forms as salary and then put in a claim for unpaid PAYE/NI.

Company owners should always bear in mind that dividends are returns on investment (ie on the shares you hold in the company); they are not glorified salary/employment income.

Dividends should be paid by your company in proportion to the shareholding (ie number of shares each person owns), of course.

Dividends can be taken as often as you like, funds permitting in your company’s bank account.

By graeme on May 6, 2011

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