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Any Answers Answered: Dividend vouchers

3rd May 2016
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In this month’s Any Answers Answered video series on AccountingWEB, Giles Mooney and Tim Good tackle two recent questions on dividend vouchers and incorporation of buy to lets.

The TAXtv hosts initially look at a question about dividend vouchers originally posted by AccountingWEB member Malcolm McFarlin.

The questioner points out that now we no longer need to tell people about the credit element of the dividend, do we need to do any paperwork at all?

Tim Good explains that this has been triggered by the recent changes to dividend tax rules and that yes, we still do need dividend vouchers.

Watch the video clip below to find out more.

The second question this month addresses incorporation of rental properties, originally posted by AccountingWEB member danielgricks.

Tim Good said it very much depends on the circumstances, but added if you are seeking to avoid the restriction in interest tax relief for individuals to just a 20% credit which is being brought in in April 2017, actually if you put the properties into a company and the company pays the interest the effective relief is only going to be at 19%.

Find out more from Good and Mooney:

For the latest episode of TAXtv visit PTP Interactive. TAXtv is a monthly tax update programme available as an annual subscription from £199, (11 issues plus special editions) to view online, download from the internet or watch on DVD.

Replies (3)

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By tax novice
04th May 2016 14:15

I have been doing small companies for 30 years and avoided dividend documentation. Have been investigated produced nothing and its been fine. When it comes to the crunch people take a practical view. Our policy is not to charge clients a penny more than we have to. We have 500.

Thanks (0)
Replying to tax novice:
04th May 2016 19:32

I whole-heartedly agree. Practical approach is what clients want.

In my opinion, if its clearly evidenced via a suitable bank reference on the bank statement: "Daniel Dividend" and so on, then its clear what it is and to whom. We only do dividend paperwork when a dividend is paid by virtue of a directors loan account "payment". I don't see how HMRC could construe such a payment as anything else in such circumstances (assuming the dividends were legal).

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Jennifer Adams
By Jennifer Adams
05th May 2016 16:13

For more detail see article contained in Accweb Company Law Library - article written in Checklist format.
Re minutes:
"minutes are only required if a meeting has taken place. Whether the dividend paid is interim or final no meetings are required under the Companies Act 2006 for private limited companies - no meetings equal no minutes".
Re counterfoils
"Dividend vouchers are not in themselves a legal document. There is no mention of vouchers in the CA 2006 but one is required for tax purposes under s1104 CTA which states that if a dividend payment is made into a bank account then a certificate of tax deduction must be issued, “within a reasonable period”".

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