Dividends paid from small companies
April 27th, 2009
If you are paying yourself through your own company and calling the payments dividends then beware!
Paying yourself dividends is absolutely fine but you must ensure that you have post-tax reserves available at the time of payment - this means putting some accounts together.
In addition, in light of the Government’s stated intention to look carefully at the extent to which profits are extracted as dividend rather than salary, you should also:
- Ensure that the distribution is approved via a signed board minute (even if there is only one director / shareholder)
- Prepare a dividend voucher to evidence the payment, date & tax credit
The content of this article is for general information only. It should not be relied on and action which could affect your business or personal circumstances should not be taken without appropriate professional advice.
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