What figure to look at for declaring dividends

My accountant who does not do my book keeping asked me to send her the the amount that I want to declare the dividends, but I don’t know what I need to look at, to work this out. So I have sent her the accounting file so she can find it.

For future interest, exactly how do you work out the dividends for a ltd company. Would that be the equity or net profit before tax or what?

I tried to find this information in the guides as I thought that this would be in the guides - but I cannot seem to find the contents page for the guide anymore so its impossible to find a specific guide - I even tried using the browser search, but came up with nothing in the guides

For the Guides use the Tab across the top of the Forum page - but dividends wont be covered there.

As for Dividends, that depends on your local tax office stipulations and it is generally allocated out of Net Profit after tax - the amount of remaining profit available for distribution to owners.

Your accountant should be able to advise if there is a minimum % distribution required.
If not, then any distribution should be considered in light of your personal tax situation as there is no point pushing yourself into a higher tax bracket, unless your country has a dividend imputation scheme which would eliminate bracket creep

I have clicked on the guides at the top, as well as clicking on guides under the all categories. I guess they must have changed how it looks as its now very difficult to find a specific guide - in the past, it had a contents page.

I think I will wait to hear what my accountant says as maybe the law is different here. I don’t know how to work out the corporation tax, and she wouldn’t have asked me to declare the dividend amount if I need to know the corporation tax first. I think, here the dividend might be declared out of net profit before tax, not after tax.

But you have in general answered the question. I need to be looking at the net profit either before or after tax. Thanks

Guides organization is being revamped. Everything previously under the Guides category on the forum is now under either Best Practices or How to… The Best Practices category guides have all been redone to be in line with the goal for that category: general, widely applicable information about various topics, sometimes even more philosophical in nature than the former “enter this, click that” instructions. How to… guides will be more like the old style: explicit instructions for how to do something. Both have tables of contents when you click the category.

You’ve been using Manager long enough, @dalacor, that you may remember the Guides used to be on a separate web site before they migrated to the forum. @lubos is moving back in that direction. He also has plans to revise the scheme for how releases are announced and described.

No I can see that you guys have been working hard to update and revamp the guides. I am not criticising. I just wanted to highlight that if you are looking for something like say dividends - its very hard to find where in the guides it is if you don’t know where to look. Thats what I liked about the contents page that used to be there - it was easier to find the relevant section. What you have got is explanations per tab, but something like how to calculate dividends doesn’t go under a tab.

It was just more to make you aware of how the end user sees the guide.

All understood. And it’s a work in progress. Besides, there isn’t anything about dividends to find. :wink:

Generally, corporation tax is a set rate and for your 2016/17 20% or 20p in the pound - read here

https://www.gov.uk/government/publications/corporation-tax-main-rate

If you put “UK Dividend” into google, there are a number of reports to read. It appears that over the past few years a number of changes has been occurring but you may need to separate out Public Company v’s Private Company dividends - but your “quaint” accountant should be up to speed here.

My quaint acountant lol :grinning: I actually think she is very good at her job. I will leave the corporation tax to her. You are correct that its 20% of net profits, but by the simple expedient of moving things from P & L to balance sheet for example or vice versa, this affects the Corporation Tax as well as claiming for other things that I may not have claimed for over the year.