Dividend vouchers

marinemarine Feels At HomeRegistered Posts: 31
Evening

I have a client that pays themself a small amount of salary every month and then draws money (or should do once a month) as a dividend.

BUT they are using the business account as a personal account and using there debit card to pay for shopping etc.

I know that you are supposed to produce a dividend voucher every time they draw money but this would take to long.

Any ideas how to get around this please?

Thanks

Tim

Comments

  • Anne BoleynAnne Boleyn Well-Known Registered Posts: 196
    Dividend vouchers

    Hi Marine

    Just to be sure we're not talking at cross purposes, your client is a limited company?

    Dividend vouchers are not something to be got around. A dividend is declared by the Directors to distribute profits. Do you provide monthly accounts to your clients so they know there are profits to be distributed? Any private expenditure from the Company's bank account will go in the the DLA and is owed back to the company.

    Regards
  • marinemarine Feels At Home Registered Posts: 31
    Hi Anne

    Yes its a limited company.

    Only just taken the job on, monthly accounts will be done by myself and im aware that i need to take into account corporation tax before declaring the dividend

    Just would like to know if there would be an issue with the amount of transactions going through rather than 1 payment once a month?

    If any one has a dividend template i could use i would be most grateful.

    Best wishes

    tim
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,440
    I would certainly be encouraging them to keep their private spending separate.

    You can effectively vote dividends to cover the 'drawings' but this can get messy.
    You could technically vote a dividend and they can re-introduce the money through the DLA. This will then give them something to draw against.

    I have also sent you a PM regarding dividend voucher template
    Regards,

    Burg
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    marine

    Two further points.

    Be careful if the DLA is overdrawn as this could be seen as earnings by HMR&C subject to NI.

    It might be an idea to ensure that the Co has a minute somewhere saying along the lines that in the event of overdrawn DLA, monies taken by the directors are not be earnings and will be repaid by either paying back the monies or declaring a dividend.

    Julia
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