Dividend declarations and vouchers
Preparing for the end of the tax year can be a stressful time for contractors. Working with a contractor accountant can help ease this as they will be able to guide and prompt you to ensure that you have all the right information to hand in readiness. If you are set up as a Limited Company, one important task is to have all your company dividend declarations and vouchers fully documented to make sure they are ready for preparation of your company accounts and self assessment tax submission.
Ideally all relevant paperwork will be updated regularly throughout the year. However, in many cases a bit of accounting housekeeping may be needed to ensure that your accountant has all the information they need. This helps them both prepare your tax return and advise you appropriately on any relevant tax issues.
When to start preparing
Approaching the end of the tax year is a good time to ensure you get all your records up to date. One set of documents to make sure that you have is both a dividend declaration and voucher for any dividends that have been paid out during the year.
As you get closer to the end of the tax year the exact dates of dividend payments become more important, as these will determine which tax year your payments will fall into. You need to bear in mind that most contractors pay ‘interim dividends’ from their Limited Companies and these are deemed as paid on the actual date they leave the business bank account. For this reason it’s a good idea that if you want any dividends allocated in the tax year, you make sure that the payment is made around 31 March , as this will give the payment time to clear the bank account before 5 April.
Some dividends are not actually taken in cash, for example where dividends are declared to clear off director loan accounts. These dividends will be shown as paid, as per the date shown on the dividend declaration and voucher.
The important point is to ensure that all dividend records are complete and the originals retained. Working closely with your accountant will help make sure your records are well maintained and prepared for the coming tax year end.
This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.