Reply to: Pay a dividend without an accountant

[SackmanandCo]

not a word of a lie!

[Wanderer]

retrospective board minutes- one should be careful. There have been cases where HMRC have used ink reading machines to check!

Maybe they would go as far as doing a forensic analysis of the printer steganography to check when it was printed in a very serious fraud case but I think you've been watching too much CSI.

HMRC: Ahem. We have sent this for forensic analysis and found that it was printed 6 months after the meeting. Do you have anything to confess?
MYCO: No tulip Sherlock. This is obviously a duplicate produced from an electronic copy of the meeting minutes. The original copy of the meeting minutes was of course printed out on the day and has been archived (somewhere) but as I didn't have it to hand I have presented you a duplicate copy. As company director and sole shareholder I can assure you this is an accurate record of the meeting. Are there any further questions or will that be all?

[Stag Cozier]

retrospective board minutes- one should be careful. There have been cases where HMRC have used ink reading machines to check!

Stealing the techniques used on the turin shroud

[SackmanandCo]

retrospective board minutes- one should be careful. There have been cases where HMRC have used ink reading machines to check!

[SallyPlanIT]

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

The 10 months for accounts filing changed last year down to 9 months with companies house, 12 months with HMRC. The corporation tax is due to be paid 9 months and 1 day after the companies year end accounting period. The CT600 corporation tax form is due with HMRC 12 months after the company year end.

[Wanderer]

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

As others say, it's worth getting an accountant to get you up and running and get you into a routine and figure out what's yours and what's the Hectors. The paperwork you need to do can creep up on you and you will end up in deep trouble.

If other people hold shares in the company then you have to do it all by the book from day one. But if you are the company director and sole shareholder (which is probably the case) and you want the money out of the company then just take the money and call it a "Director's loan". Whatever about the letter of the law, the only people who will complain are the share holders and that's you.

Your accountant, they will declare it as a dividend (or a loan you have to repay before the end of the company year if you took too much) and sort out the paperwork. Don't worry too much about all the formalities, your accountant can retrospectively write up the minutes of meetings (that never actually happened anyway) later on. No one is going to check at this stage, but it does have to be properly accounted for in the year end accounts.

Don't go and take too much then spend it and not be able to pay it back though, that will get you in a power of trouble.

Now get an accountant on the job.

[northernladuk]

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

To be honest with a question like this why not err even more on the side of caution and get an accountant. Doing your own tax needs a bit of nouse and if you are unable to research some of the basic tasks without having to ask on an open forum I would question the safety of doing your own accounts for now until a better understanding has been gained. Get an accountant for a year and take note of what he does and then go yourself later. You never know, with his knowledge he may actually save you his fee over what you might have forgotten/got wrong.

[THEPUMA]

We have a template which, once populated with your company details, will generate a dividend minute and voucher if you input date, recipient and amount.

PM if you want a copy.

PUMA

[Clare@InTouch]

Google is your friend <snip>

[NiugeS]

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...

Does anyone have a template for the minutes and voucher I can see?

Any help appreciated.



Thank you in advance,
NiugeS

[achillea]

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

[chicane]

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.

[oraclesmith]

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.

[achillea]

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.

[xoggoth]

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"