Ainsworth & Co, Chartered Accountants and Business Advisors.

Our Guide to Limited Company Dividends

Guide to Company Dividends

IMPORTANT NOTICE: It was announced on 8th July 2015 that the UK tax rules for the 'tax credit' aspect of Dividends will be removed from the Income Tax Year 2016/17 onwards.

Our web page in the Tax section explains the new Dividend Tax calculation:
New UK Dividend Tax Calculation

Dividends are a distribution of Limited Company profits.

Summary Points:

• Dividends are a distribution of profits
• Dividends can only be distributed from retained profits
• Dividends cannot be backdated
• Dividends are not expenses
• Dividends are not salaries or wages
• Dividends are not an allowable deduction which reduces Corporation Tax
• Dividends should be approved and recorded by the Director(s)
• A Dividend Confirmation (aka Voucher) is requiredbr>

Dividends and Income Tax

A new UK Dividend Tax system commences from Income Tax year 2016/17.

Please visit our web page which describes the old and the new methods:

New UK Dividend Tax Calculation

Dividends and Corporation Tax

Dividends are not an allowable deduction (as an Expense) in the calculation of Corporation Tax.

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More Information About
Limited Companies

Companies House

Companies House is the home and registration place for all companies in England and Wales.
Companies House Link


The UK Government is building a substantial website of information for businesses:

Our Webpages:

Limited Company Formation

Setting Up A Limited Company

Shareholders' Guide

Directors' Guide

Director's Loan Account

Annual Accounts

Getting Paid from your Company

Limited Company Bookkeeping


Limited Company Taxes

Confirmation Statement

Dormant Companies