Dividends

1. Calculating dividends - dividends are paid according to company law from the distributable reserves of the company.

As a rule of thumb, to calculate the distributable reserves of the company, which is the total amount available for dividends, take gross fees (excluding VAT) less any expenses (including salaries) and deduct 20% (to cover corporation tax on gross annual profits of up to £300,000 - if your annual gross profits exceed £300,000 then the deduction in respect of corporation tax will be higher, in which case please contact us).

This is the maximum amount that should be paid as dividends.

2. Paying dividends - dividends can be paid at any time by the company either at regular (e.g., monthly) or irregular intervals.

3. Dividend vouchers - Accounting Made Easy produces a Dividend Voucher for each dividend transaction created. These can be clicked and printed at any time.


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