Using MyBookkeepingManager to Record Dividend Payments & Create Tax Vouchers

Dividend payments are a common way of remunerating shareholders of a company. There may be interim dividend payments as well as a final dividend payment, and the company must have made sufficient profit for the dividend(s) to be paid. The profit does not have to be from the current year, it can be from previous years and being held in the company bank account as retained earnings.

Taking dividend payments is typically how contractors working through their own limited companies extract some of the money from their businesses, but it is not something that you can do if you are a sole trader.

How Much Can a Dividend Payment Be?

If a business turns over, say, £100,000 in a particular financial year, and the costs (salaries, expenses, etc) of running the business amounted to, say, £50,000, the amount of corporation tax owed would be £10,000 (using 20% as the corporation tax rate). This would leave £40,000 available for dividend payments.

If there are ten shareholders in the business, and they all own the same number and type of shares, they will each receive £4,000 in dividend payments if all the available money was used.

Dividends are paid per share, so the more shares you own, the greater your dividend payment will be.

What is a Dividend Tax Voucher?

When a dividend payment is made, a tax voucher must be raised and issued to the shareholder. Traditionally, this was normally done by post but these days it is more normal to generate and distribute the vouchers electronically.

The dividend tax voucher shows the size of the dividend, and the amount of tax credit. The tax credit shows the amount of tax paid by the company on behalf of the shareholder. Dividends are paid after tax (at the basic rate) has been deducted. If you are a higher rate tax payer, you may well have additional tax to pay on the dividends you have received.

You can find out more about dividend payments and dividend tax vouchers here.

Using MyBookkeepingManager to Generate Dividend Tax Vouchers

List existing dividend tax vouchers

To list existing dividend tax vouchers:

  1. From the menu bar at the top of the MyBookkeepingManager window, click Maintain Dividend Payments.

The details are shown of all the dividend payments that have been recorded in MyBookkeepingManager to-date.

Create a dividend tax voucher

To create a dividend tax voucher:

  1. From the menu bar at the top of the MyBookkeepingManager window, click Maintain Dividend Payments.
  2. Click the Create New Dividend Tax Voucher button.
  3. Complete the form and click the Create Dividend Tax Voucher button..

Select the year in which the dividend payment is made

From the drop down list box, select the year to which the dividend applies. The default year is taken from the default data settings.

Dividend Received

Enter up to eight digits for the net dividend amount received. This is a compulsory field.

You can enter numbers such as 1234, 1234.56, 1234.00, and so on.

Date of Dividend

Enter up to 30 characters of free format text. This is a compulsory field.

Company Year End Date

Enter up to 30 characters of free format text. This is a compulsory field. This is the end date of the company's financial year.

Company Meeting Date

Enter up to 30 characters of free format text. This is a compulsory field. This should be the date on which the dividend payment(s) was/were set.

Company Name

Enter up to 50 characters of free format text. This is a compulsory field.

Company Address

Optionally, enter up to four lines of 50 characters (maximum) for the company's address.

Holding

Enter the number of shares held. This is a compulsory field.

Recipient Name

Enter up to 50 characters of free format text. This is a compulsory field.

Recipient Address

Optionally, enter up to four lines of 50 characters (maximum) for the recipient's address.

Edit a dividend tax voucher

To edit a dividend tax voucher:

  1. From the menu bar at the top of the MyBookkeepingManager window, click Maintain Dividend Payments.
  2. Click the dividend tax voucher you want to edit (in the Date of Dividend Payment column).
  3. Edit the form and click the Submit Updates to Dividend Tax Voucher button.

For an explanation of the fields, see above.

Delete a dividend tax voucher

To delete a dividend tax voucher:

  1. From the menu bar at the top of the MyBookkeepingManager window, click Maintain Dividend Payments.
  2. Click the check box(es) against the dividend tax voucher(s) you want to delete, and click the Delete Dividend Tax Voucher(s) from Database button.
  3. Click the OK button to confirm the deletion.
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