Ainsworth & Co, Chartered Accountants and Business Advisors.

Our Guide to Limited Company Dividends


Guide to Company Dividends


New UK tax rules for Dividend Tax have been introduced from the Income Tax Year 2016/17 onwards. In particular the 10% 'tax credit' aspect of Dividends has been removed and new Dividend Tax rates and bands have been introduced.

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 required



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


GOV.UK


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


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

Dividends

Limited Company Taxes

Confirmation Statement

Dormant Companies

Stationery