Dividend reporting to HMRC

[TonyC99]

I am about to pay an interim dividend in a UK close company. I have drafted minutes for a meeting of directors and have created a voucher showing the tax credit etc.

Is there anything else I need to do - such as notify HMRC, complete the elusive CT61 form?

Thanks for any help.

Tony
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[wamstax]

Hi there the interim dividend does not exist until payment and the voting and payment of an interim dividend should only be contemplated AFTER you have considered the company's ability to make such a distribution i.e. it has sufficient profits to enable it to pay the dividend and sufficient finances to stand the payment.

Dividends do not require to be returned on CT61 etc BUT remember and include the gross dividend (i.e. dividend paid multiplied by 10 and divided by 9) on your tax return for the year to 5th April during which the dividend is paid. Remember that each shareholder should receive an individual cheque in respect of their shareholding (or appropriate waivers held etc). Alternatively if the dividend is not being paid by cheque (and paying by cheque is the preferable action that should be taken) then any transactions via director/participators current/loan account should be recorded in the books of the company on the day of payment.

[TonyC99]

Thank you for the comprehensive reply. Also, the information about payment was very helpful - I was not aware that this aspect was so critical.

Thanks again.

Tony
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[King_Maker]

It is usually good practice to have some management accounts available to demonstrate sufficient distributable reserves.