Dividend help

[mohasi]

Hi everyone,

I am confused about dividends, I have a small limited company, and my accounting date is the end of Jan. I use an online software to manage my accounting but I am confused about dividends.

Q1. When is the latest I can write out the memo and voucher?
Q2. When is the latest I can pay out the money from my company account to my personal account?
Q3. How do I pay the dividend tax? Does it go on the Corp tax forms?

Thank you.

[WTFH]

Hi everyone,

I am confused about dividends, I have a small limited company, and my accounting date is the end of Jan. I use an online software to manage my accounting but I am confused about dividends.

Q1. When is the latest I can write out the memo and voucher?
Q2. When is the latest I can pay out the money from my company account to my personal account?
Q3. How do I pay the dividend tax? Does it go on the Corp tax forms?

Thank you.

Hi Mohasi,
You would be best to ask your accountant these questions.
If you don't have an accountant, you should get one.

[jamesbrown]

Hi everyone,
Q1. When is the latest I can write out the memo and voucher?

Latest for what? It is deemed paid in the personal tax year where it's made available to you, which essentially means when the paperwork says it's declared as becoming payable (ignoring interim dividends).

Q2. When is the latest I can pay out the money from my company account to my personal account?

You can pay the money later than the date it is declared as becoming payable, but it will be taxable when made available to you (declared as becoming payable).

Q3. How do I pay the dividend tax? Does it go on the Corp tax forms?

It has nothing to do with taxation of your company, dividends are paid from profits, it is a personal tax, so it's aligned with your personal tax year and SATR.

Given that you're asking such elementary questions, you're probably going to make some massive blunders more generally unless you have an accountant.

[northernladuk]

The problem here is even if we could give you the answer to your question it's likely not to make too much sense and raise a whole host of other questions.

If you do manage to wade through it how do you know it's right? If you get it wrong you could end up paying more in fines and interest that you would if you got yourself an accountant. If you are struggling with dividends how are you going to do all the other activities required in a year for your accounts?

Get yourself an accountant and get professional advice.

[Craig@Clarity]

Hi everyone,

I am confused about dividends, I have a small limited company, and my accounting date is the end of Jan. I use an online software to manage my accounting but I am confused about dividends.

Q1. When is the latest I can write out the memo and voucher?
Q2. When is the latest I can pay out the money from my company account to my personal account?
Q3. How do I pay the dividend tax? Does it go on the Corp tax forms?

Thank you.

Q1. The director can declare a dividend at any time provided there is sufficient retained profit in the company.
Q2. You can pay the dividend any time on or after the payment date of the dividend.
Q3. Dividends are treated as personal income so it goes on your self assessment tax return and any tax payable by the following 31 January after the end of the tax year. It doesn't go on your corp tax forms. Dividends are paid out of profits AFTER corporation tax so don't make the common mistake thinking that by paying dividends, it's going to reduce your corporation tax bill.

[mohasi]

Q1. The director can declare a dividend at any time provided there is sufficient retained profit in the company.
Q2. You can pay the dividend any time on or after the payment date of the dividend.
Q3. Dividends are treated as personal income so it goes on your self assessment tax return and any tax payable by the following 31 January after the end of the tax year. It doesn't go on your corp tax forms. Dividends are paid out of profits AFTER corporation tax so don't make the common mistake thinking that by paying dividends, it's going to reduce your corporation tax bill.

Thank you so much for the clear response.

Question #1 may have been phrased ambiguously, so I would like to clarify. Say my accounting end date is 31st January, so the last period was 01/02/21 -> 31/01/22 for years 21-22. If I had not declared a dividend for that period by 31/01/22 could I do it now?

[jamesbrown]

Thank you so much for the clear response.

Question #1 may have been phrased ambiguously, so I would like to clarify. Say my accounting end date is 31st January, so the last period was 01/02/21 -> 31/01/22 for years 21-22. If I had not declared a dividend for that period by 31/01/22 could I do it now?

Again, dividends have nothing to do with your company year end. At any moment during the calendar year, you can declare a dividend of an amount equal to or less than your retained profit. The dividend paperwork will declare when the dividend is payable. That is the date it becomes taxable on your personally, even if it's paid to your personal account at a later date (again, ignoring interim dividends, which are not relevant here). The personal tax year runs from 6 April through 5 April.

Obviously, you cannot backdate dividend paperwork (legally). Thus, if you forget to declare a dividend in the tax year ending April 5 2022, you cannot declare one now as payable on April 5 2022 and have it taxed in the 2021-2022 tax year, in case that's what you're asking.

[jamesbrown]

But, seriously, stop messing around and get an accountant. Clarity would be a good choice (based on personal experience of Craig and Clare from a long time ago).