Paying dividend over several days

[Craig at Nixon Williams]

Thanks Craig - as an aside, do you or Nixon Williams in general have much experience with FreeAgent - I'm sure its been mentioned that you have clients that use it. If so I was wondering what your view is on FreeAgent's handling of dividends to multiple shareholders, in particular the paperwork.

FreeAgent seem confident that it is OK however both my accountant and myself have some concerns that the paperwork for multiple shareholders is sub-standard...for a given total dividend, you have to essentially create a dividend transaction for each shareholder which results in a set of minutes/voucher for each person. Ideally, IMO, there should be a single set of minutes declaring the total dividend (or expressed as £x per share) with the breakdown per shareholder, then individual vouchers.

Would you advise drawing up my own paperwork or would the paperwork produced by FreeAgent be adequate? It seems like the sort of thing that HMRC would have to be really nit-picky about, especially if the timing makes it pretty clear that its really a single dividend, but who knows if its the sort of thing HMRC would choose to complain about.

Our only experience of Freeagent was many years ago and it was very different to what I believe it is now.

Your view on the dividend paperwork is pretty much correct - there should be a single set of minutes for the value of the dividend but it would not breakdown the individual payments to shareholders. There would then be a tax voucher for each shareholder showing how much they receive and also the tax credit.

[TheCyclingProgrammer]

The way that you are suggesting doing this is absolutely fine - fire away!

Thanks Craig - as an aside, do you or Nixon Williams in general have much experience with FreeAgent - I'm sure its been mentioned that you have clients that use it. If so I was wondering what your view is on FreeAgent's handling of dividends to multiple shareholders, in particular the paperwork.

FreeAgent seem confident that it is OK however both my accountant and myself have some concerns that the paperwork for multiple shareholders is sub-standard...for a given total dividend, you have to essentially create a dividend transaction for each shareholder which results in a set of minutes/voucher for each person. Ideally, IMO, there should be a single set of minutes declaring the total dividend (or expressed as £x per share) with the breakdown per shareholder, then individual vouchers.

Would you advise drawing up my own paperwork or would the paperwork produced by FreeAgent be adequate? It seems like the sort of thing that HMRC would have to be really nit-picky about, especially if the timing makes it pretty clear that its really a single dividend, but who knows if its the sort of thing HMRC would choose to complain about.

[Craig at Nixon Williams]

The way that you are suggesting doing this is absolutely fine - fire away!

[TheCyclingProgrammer]

I'm about to declare a somewhat bigger dividend than usual...more than the daily payment limit that my bank (HSBC) allows for payments - 5x as much in fact.

It seems like the best thing to do is to declare the dividend with all the normal paperwork and pay the dividend by way of a credit to the shareholder loan accounts for both shareholders. I can then transfer the money over the course of several days, with each payment simply being a deduction from the loan account.

All the normal requirements for a valid dividend are in place - more than enough retained profit etc. and minutes and vouchers for the total amount will be produced. Is this the best way to handle this?

I'm pretty sure what I want to do is OK but my accountant is on holiday and I thought I'd ask on here before I pulled the trigger.