{"id":231,"date":"2021-02-15T02:36:43","date_gmt":"2021-02-15T02:36:43","guid":{"rendered":"https:\/\/guide.no-worries.co.uk\/?post_type=ht_kb&#038;p=231"},"modified":"2021-02-15T02:36:44","modified_gmt":"2021-02-15T02:36:44","slug":"taking-a-dividend-from-your-company","status":"publish","type":"ht_kb","link":"https:\/\/guide.no-worries.co.uk\/index.php\/knowledge-base\/taking-a-dividend-from-your-company\/","title":{"rendered":"Taking a dividend from your company"},"content":{"rendered":"\n<p class=\"has-theme-default-color has-text-color wp-block-paragraph\" style=\"font-size:22px\">We have produced this quick guide to inform you of the obligations you have in taking a dividend from your company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>1: Declaring and paying dividends<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A dividend can be declared at any time but will only be valid where the declaration is made in accordance with company law (s. 829 to s.853 Companies Act 2006). Essentially this states that a dividend should only be paid from the company\u2019s profit accumulated at the time the dividend is declared.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means that you cannot pay dividends out of the company tax saving pool.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s advisable to be cautious and not declare a dividend that exceeds profits. Where this happens and the recipient is a material shareholder (This means they own 5% or more of the ordinary share capital) they will be required to repay the dividend. And if the proper paperwork isn\u2019t kept, HMRC might argue that the excess is taxed and subject to NI as additional salary.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2: Paying a dividend<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Declaring a dividend is the formal step needed before actually paying it. A declaration is just a statement that says how much and when the dividend will be paid. There\u2019s no reason a declaration and payment can\u2019t happen on the same day.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>&nbsp;3: Paperwork<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where the timing of a dividend is critical this makes the need to keep accurate documentation and records equally so. Companies should record the date the dividend is declared. This might be in the form of a minute of a board meeting, or for a single director company, just a note kept with the company\u2019s statutory records (company register etc.).&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When you make a dividend payment, and record this on your No Worries \u2018Take home payments\u2019 page our system automatically creates and stores a dividend vouchers for the payment, as well as the minutes of a board meeting (Distributable profits board minutes).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>4: Other shareholders<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A dividend declared will be payable to every holder of the same type of share.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We have produced this quick guide to inform you of the obligations you have in taking a dividend from your company. 1: Declaring and paying dividends A dividend can be declared at any time but will only be valid where the declaration is made in accordance with company law (s&#8230;.<\/p>\n","protected":false},"author":2,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"footnotes":""},"ht-kb-category":[18],"ht-kb-tag":[],"class_list":["post-231","ht_kb","type-ht_kb","status-publish","format-standard","hentry","ht_kb_category-core-info"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Taking a dividend from your company | No Worries Help Centre<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Taking a dividend from your company | No Worries Help Centre\" \/>\n<meta property=\"og:description\" content=\"We have produced this quick guide to inform you of the obligations you have in taking a dividend from your company. 1: Declaring and paying 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