Declaration of dividends – what paperwork ?
When you pay yourself a dividend from your company, make sure you;
1. Prepare minutes. This must be completed at each dividend payment. It is the board declaring the dividend. You can pay yourself a dividend as many times as you like during the year.
2. Complete the “Tax voucher”.
Don’t be put off by the name…it is simply a “certificate” from the company to you as shareholders of the company; telling you of your dividend.
These are required at the declaration of each dividend because from HMRC’s point of view, if it looks like a dividend, it will be taxed like a dividend. If it looks like a salary or payment, it will be taxed as such.
Once you complete the minutes and tax vouchers, simply file them. It will be proof of dividends should HMRC ask you to produce such proof.
Remember, the 1st $£5,000 of divis are tax free (up to 5th April 2018), then they are taxed at 7.5%…so it is worth this extra admin.
You can down load a template for your minutes and Tax voucher here.