Monthly dividends - paperwork

When the dividend voucher is completed how do you calculate / declare the tax required due on the dividend?

Depends on how much you earned, you do not need to pay any income tax if you are basic rate tax payer because the 10% tax credit on dividend offset the 10% tax rate on dividend. However if you are high tax payer(2011-2012 35K OR ABOVE) you need to pay 32.5% and you have 10% tax credit effectively it is 25%

Thanks
Harry Lee

Mod note: please read the T&Cs for CUK forums. Giving advice is allowed, blatant advertising is not. You may want to change your login to Harry@MyCo, that way you can promote your company whilst giving advice.

[Clare@InTouch]

When the dividend voucher is completed how do you calculate / declare the tax required due on the dividend?

The dividends will be declared on your personal tax return, due each January, and any extra tax due calculated there too. Whether or not you pay any tax will depend on how much income you have overall, and whether you're in higher rates of tax.

[DaveB]

When the dividend voucher is completed how do you calculate / declare the tax required due on the dividend?

You will only need to pay tax on dividends if it takes you over the upper earnings threshold for basic rate income tax.

Dividends are paid from company profits AFTER tax.

[backrubber]

http://www.dixondevelopment.co.uk/wordpress/?p=129

[mulberryblue]

When the dividend voucher is completed how do you calculate / declare the tax required due on the dividend?

[backrubber]

The following two products both have dividend tax voucher templates:

Earnings Tracker (free)

My Bookkeeping Manager (99p + VAT)

They may help.

[akz786]

Many thanks for all your replies - this makes complete logical sense now - now just to select a nice voucher template

[DaveB]

Hi

I understand after doing a few searches that I can withdraw dividends say monthly if profits are there, however the confusion I have is regarding the paperwork, following some of the examples and spreadsheets it suggests declaring the number of shares.

Now if I hold say 51 shares when doing the paperwork monthly can I allocate a dividend per share i.e. if I want to pay myself £1000 for that month can I just declare that as 1 share, or must it be a division of the 51 shares every month? i.e 10 shares?

Hope that makes sense?

Thanks

Akbar

Having a Share in acompany entitles you to a Share of the profits. This is paid as a divdend.

Every share is worth the same amount and earns the same dividend. Shareholders are paid dividend based on the number of shares they hold (unles you have issued different classes of shares, this is not recommended as it complicates things and negates the legal precedent around income splitting. If you dont understand this, don't do it.)

You can issue as many or as few shares as you like. Many contractors will have just 1 share, being the entire share issue of their Co. Others may have 2 shares themselves and 1 held by their wife or partner.

When you pay a dividend you must decide the total value of that dividend and divide it equally by the number of shares issued and then pay the share holders according to the number of shares they hold.

For example.

Your Co. has issued 100 shares. You hold 75, your wife holds 25.

Your Co. declares a dividend of £1000.

Total Dividend divided by total issued shares = £10 per share.

You get 75*10 = £750
Your Wife gets 25*10 = £250.

Total dividend paid = £1000.

[Taxless]

There is certainly nothing to stop you drawing monthly dividends and you should certainly keep the relevant paperwork, Company Minutes, dividend vouchers etc.

Each time that a dividend is declared then all of the shares qualify for a dividend payment, so if you have 51 shares and want £1,000, you declare a dividend of £19.60 (as many decimals as you like) per share.

You cannot declare a dividend on just some of the shares, i.e. the 10 suggested in your post.

[Lumiere]

how about 100 shares

[akz786]

Hi

I understand after doing a few searches that I can withdraw dividends say monthly if profits are there, however the confusion I have is regarding the paperwork, following some of the examples and spreadsheets it suggests declaring the number of shares.

Now if I hold say 51 shares when doing the paperwork monthly can I allocate a dividend per share i.e. if I want to pay myself £1000 for that month can I just declare that as 1 share, or must it be a division of the 51 shares every month? i.e 10 shares?

Hope that makes sense?

Thanks

Akbar