Company has 2 shareholders, each holding 50%shares.
Before the year ended 31.3.2012, interim dividends were paid as follows - to A (not a director) - £20K; to B- £50K. A intends to receive his balance of dividends after 31.3.2012.
Firstly, under Company Law and FRS, can the company treat the remaining balance of £30K to A as proposed dividend, or under other creditor as shareholder's loan? Or should the company merely disclose only dividends paid as in total £70k during the year? Would be grateful if someone could advise how to disclose in financial statements.
On the issue of tax, for the year 2011/12, would A be assessed on Dividend Income of £20K (amount actually received) or £50K?
Would there be any problem for this late payment of Dividend in respect of Companies Law, FRS or HMRC?
Would appreciate if answers can have supporting legislations/ Standards, etc.
Many thanks in advance.
wk118
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Replies (3)
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See article written on Dividends
I wrote an article on Dividends which includes the relevant legislation.
I think will answer your questions - see link below
https://www.accountingweb.co.uk/topic/tax/dividends-checklist-get-details-right/470525
Declared dividends
It seems from the question that the director(s) declared a dividend of £100K before 31.03.2012. If so, £100K should appear as Dividends in the Reserves note and the £30K not yet paid to A should appear as a Dividend Due (not Proposed) under Creditors. If A had been a director, you could have credited it to his DLA. Do not forget the related party disclosure.
A should report dividend income of £50K in 2011/12.
Dividend disclosure
Thanks for the reply.
For the purposes of accountung disclosure, do we need to disclose dividends paid to director and shareholer under the relatrd party notes or would it suffice just to disclose dividends as a deduction under reserves.