Dividend Documentation- please help

[crimson]

My company is only one year old and during last 12 months I was paid minimum salary every month and company paid me 5 dividends. My question is about dividend documentation. My accountant prepared 4 vouchers and board meetings minutes showing INTERIM DIVIDENDS and one voucher and minutes for FINAL DIVIDEND. Last meeting before year end was annual general meeting and interim dividends were ratified and final dividend was declared in that meeting. All dividends were transferred through online bank transfers and reference on all bank statement entries is “DIVIDEND”. My questions are as following:

1) Do I need any additional documentation for interim dividends?

2) Four of the dividend vouchers produced mention word interim on it, will it be ok with HMRC?

3) Will I need to send board resolutions and minutes of meetings and dividend vouchers to HMRC in future?

4) Are there any additional documents that I need to dividend documentation?

5) Am I missing something here?

[SueEllen]

If you don't trust your accountant get a new one.

As far as I can see s/he has done everything right and you can do all those things yourself.

[malvolio]

My company is only one year old and during last 12 months I was paid minimum salary every month and company paid me 5 dividends. My question is about dividend documentation. My accountant prepared 4 vouchers and board meetings minutes showing INTERIM DIVIDENDS and one voucher and minutes for FINAL DIVIDEND. Last meeting before year end was annual general meeting and interim dividends were ratified and final dividend was declared in that meeting. All dividends were transferred through online bank transfers and reference on all bank statement entries is “DIVIDEND”. My questions are as following:

1) Do I need any additional documentation for interim dividends?

2) Four of the dividend vouchers produced mention word interim on it, will it be ok with HMRC?

3) Will I need to send board resolutions and minutes of meetings and dividend vouchers to HMRC in future?

4) Are there any additional documents that I need to dividend documentation?

5) Am I missing something here?

Don't think so. They're only interim dividends because you don't actually know what your net profit - which is the only source of dividend payments - is until you complete your year end calculations. In effect you're anticipating your annual net profit and taking it out early, which is perfectly acceptable as long as the money is there and you can meet all your other commitments.

You won't need the documentation unless HMRC ask for them during an investigation. However, not having them means that the dividend can be reclassified as income and so subject to NICs. So you're accountant is doing things properly and you just need to sign them and store them for six years.

[Jessica@WhiteFieldTax]

As others have said, I think you are fine.

[northernladuk]

As others have said, I think you are fine.

I don't. OP is legally responsible for the LTD's finance.. This post gives me the feeling the OP isn't taking this responsibility very seriously.

[northernladuk]

5) Am I missing something here?

Yes, a gasp of the very basics of your company finances, which, if wrong are your responsibility. I suggest you either change your accountant or spend sometime with him to actually understand how you pay yourself.

[Jessica@WhiteFieldTax]

I don't. OP is legally responsible for the LTD's finance.. This post gives me the feeling the OP isn't taking this responsibility very seriously.

I'm not seeing that - the right questions are being asked. Call me odl adn cynical, but I've see too many clients who take no interest at all

[Wanderer]

5) Am I missing something here?

Nah, you are doing just fine. Arrange a meeting with your accountant and tell them you find the whole thing a bit freaky and they will reassure you - as Jessica says it sounds like your accountant has everything in order.

Some of the terminology will sound a bit strange till you get used to it. I still have a giggle to myself everytime I conduct a "board meeting".

[northernladuk]

I'm not seeing that - the right questions are being asked. Call me odl adn cynical, but I've see too many clients who take no interest at all

Right questions.. 12 months too late....

I kinda get people not understanding IR35 and other complexities but not understanding the details of how you are paid just sounds wrong, particularly 12 months later. I suppose while you don't have a problem it doesn't matter that much but it's gonna be a mess if it does go wrong.

[Craig at Nixon Williams]

Hi Crimson,

I have answered your questions, in order, below:

1. No you will not need any additional documentation for an interim dividend; the minutes and tax voucher are the only paperwork that you will receive for any dividend (though they differ slightly for interim and final dividends).

2. For the tax vouchers there is no requirement to state whether the dividend is interim or final - though I don't see that this would do any harm. You should note that the date at which interim and final dividends become taxable is different - the tax date of an interim dividend is the date that it is actually paid whereas the tax date of a final dividend is the date that the resolution was passed to pay the dividend. If you actually pay the dividend on the date of the tax voucher then this shouldn't be a problem.

3. You won't need to send copies of resolutions or tax vouchers to HMRC. An interim dividend is nt passed by resolution but is simply voted for by the directors, the minutes of this should be kept with the company's records. Final dividends are passed by resolution and a copy of the resolution should be kept with the company's statutory documents (assuming it is a written resolution and therefore doesn't need to be filed with Companies House). The tax voucher is for your own records, you will need details from these to complete your personal tax return. None of this actually needs to be sent to HMRC but all should be retained for 6 years in case HMRC wishes to inspect them.

4. You should also retain copies of accounts that were used in deciding on the dividend amounts - again, they may be called upon if your affairs were to be examined by HMRC.

5. I can't see that you are missing anything here. You have mentioned about your company having an AGM - there is no requirement for a private company to hold an AGM and companies that do hold an AGM do so after the end of the accounting year to present the financial statements to the shareholders and vote for or against resolutions put forward by the directors, including the payment of a final dividend based on the final profit figure.

I hope this helps, feel free to ask anything else though!

Craig