Recording Dividend Payments in Accounts

Home > Business Forums > Finance and Tax Forum > Payroll and PAYE Forum
Reply
Viewed 13,214 times

Hello,

Please could you advise how I would record dividend payments in my accounts.

Many thanks!!!
0

Hi there,

 

Dividends are recorded in the accounts after profit and corporation tax, and you record simply the amounts actually paid out by the company. Let me know if i can be of any further assistance

 

With regards

 

Tim Brown

0

The dividend is declared at a directors board meeting and should be recorded in the minutes of the meeting.
The actual payment of the dividend is recorded in the accounts as a payment with the opposite entry reducing the retained after tax profit.

Shareholders should also receive a dividend tax credit voiucher which you can obtain free from this page on the DIY Accounting website with more information about dividend tax credits
http://www.diyaccounting.co.uk/articles/small_business/dividend_tax_credit.htm
0

Dear Marian

I agree with Tim and Terry,before you know the actual profit after tax, the money you took out from the company during the related financial year is basically treated as a loan.

Regards
Harry Lee
0

Hello

As Tim says - Dividend is not a business expenses but a distribution of available profits the company has made. So in terms of recording:

-Ensure dividend vouchers are completed at the time dividend are paid out.

- In your accounts if the dividend is paid out - This will be a deduction of the cash balance and a deduction of the profits that are available to the company.

- Also there some very good plain English books available on the market explaining how to do this and lots of other accounting entries. They will be far clearer than my explanation. One of the authors is Frank Wood, whose books on book-keeping and accounting are very easy to understand for a lay person.

Kind regards

Aziz

0