Pay a dividend without an accountant

**Bluebird** · 5 June 2007, 14:21

Originally posted by nucastle

Anyone know how one would go about declaring a dividend, when you dont have an accountant (yet).

Company was incorporated 3 months ago, and im starting to get a few payments here and there .... Would like to pay myself my first 'dividend' but dont know how to do it without an accountant and the 'divi voucher' thing they do.... anyone?

all you need is a set of minutes and a voucher [ excel ? ] which shows the amount and the tax, you can still pay it and get your accountant to ort out at a later date...

**Jason D** · 5 June 2007, 14:24

Ill send you a template if you like

Dont forget it must come from profit so take all expenses, overheads, annual adjutstments and CT into account.

**achillea** · 5 June 2007, 14:28

I keep a monthly record of revenue and expenses and pay myself a quarterly dividend based on what I anticipate my annual profit to be after tax. My accountant only sorts out the paperwork (ie dividend voucher and minutes) when he is compiling the annual accounts - these only have to be filed 10 months after your financial year end so you should have plenty of time to get an accountant

**nucastle** · 5 June 2007, 14:29

Cheers, a template would be great thanks

pm with my email address on its way?

..... So i want to keep money in the business, but pay myself a divi out of a proportion of whats left in there at the moment - obviously i aint paid any CT or other outgoings (apart from some expenses im putting through) yet ... but is the max dividend based on what profit could have been at that point in time?

Cheers

**xoggoth** · 5 June 2007, 14:32

Tax credit is 10% of gross dividend. Net divi = amount payable, is gross divi less tax credit. There is no fixed format but you should show name, address, date of payment, tax credit and amount payable.

There is no legal obligation to minute it but probably best to. "At general meeting of xxx resolved to pay sum of xx to xxx on xxx date"

**achillea** · 5 June 2007, 16:13

You can take out what you like but I always take a view at the end of each quarter as to:
- what's my cumulative profit for the financial year to date less estimated CT for the year to date (now 20%)
- how much revenue I'm likely to bring in for the rest of the year minus forecast salary and expenses.

If I think i've got revenue coming in for the next quarter I take out a larger proportion but always make sure I'm going to make enough profit to cover CGT and dividends.

**oraclesmith** · 5 June 2007, 18:10

As far as I am aware, the Directors have a legal responsibility to limit dividend payments according to available company profits. If your company does not have the clear profit available at the time the dividend is declared, it should not pay a dividend. In my opinion.

**chicane** · 5 June 2007, 18:30

I was involved in a situation a couple of years ago in a previous Limited where myself and the other Director got our calculations wrong and paid out dividends in excess of available profits.

The accountant added a paragraph to the end-year accounts stating that the Directors mistakenly believed that there were sufficient funds to pay the divis, and advised us to get plenty of money in during the next couple of months to rectify the situation.

In the end, it didn't seem such a big deal, although I'm not sure how such a situation would stand up under investigation.

**achillea** · 6 June 2007, 16:03

Agree with Oraclesmith - definitely err on the side of caution and make sure there is sufficient distributable profit available before issuing a dividend.

Pay a dividend without an accountant