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If your company has enough retained profit, it is likely you will want to declare a dividend payment.  This may be just for yourself, or for a number of shareholders.  In declaring a dividend payment, you need to make sure you complete the correct documentation to ensure there is a legal record of the dividend being generated and paid.

 

To declare a dividend payment you need to complete two documents:

  1. A board minutes document
  2. A dividend tax voucher

We have developed template documents to help you ensure that the documentation you produce meets the required criteria.  See our guide below for how to complete these forms:

 

Dividend board minutes template
In this document you need to ensure the following information is included:

  1. Your Limited Company name
  2. The date the dividend was approved
  3. Your name (as Director of the Business)
  4. Your company address

Within the text, you will need to detail the value of the dividend being paid per share.  For example, if your registered shareholding with Companies House is 10 shares at £1 each and you want to pay a dividend of £5000 in total, payable on 01/02/2019 you would write:

“It was resolved that an interim dividend of £500 per £1 Ordinary Share be declared and made payable on 01/02/2019 to shareholders at the close of business on 01/02/2019.”

The dividend minutes form covers the dividends paid by the company in total, so you don’t need to split it out to the shareholders if there is more than one shareholder within the business.  However, if there is more than one Director of the business, who will need to authorise the dividend being paid, then you need to add their names to the list of the Directors present.  This will provide evidence that all Directors have approved the dividend being paid.  If you are the only Director of the business, then you will just sign this off as the only Director of the business.

 

Dividends tax voucher:
The tax voucher is required for each shareholder, so if there is more than one shareholder then you will need to complete a dividends tax voucher for each person.  There is a requirement to confirm the dividend paid and the specific shareholder, along with their allocation of shares.

It is important to detail the company name, business address, date of the dividend approval and the name of the shareholder the tax voucher relates to. Then add their “holding” to the voucher; this is the number of shares they hold (e.g. 5 ordinary shares).  The dividend rate is the total dividend paid divided by the number of shares the shareholder holds.  For example, if the shareholder receives £5000 and holds 5 shares, the dividend rate would be £1000 per share.  The total amount of dividend paid can also be recorded on the voucher, to provide clarity of the amount paid.

 

Next steps:

  1. Download the templates using the button below
  2. For more information on dividends and how to pay yourself, our Spotlight Partner SJD have produced The Complete Guide To Contracting.

 

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