How to declare dividends properly: board minutes and vouchers

Distributable reserves are accumulated realised profits less accumulated realised losses, after corporation tax — not the bank balance and not this month's sales. Check them against management accounts prepared to a date close to the declaration.

Money sitting in the account may be VAT and PAYE you are holding for HMRC. Paying a dividend out of it does not make it yours.

Record the date, who was present, that the directors reviewed the company's distributable reserves and the accounts relied on, the amount per share, the class, and that the directors resolved to pay an interim dividend on that basis.

Sole director companies still minute the decision. A single-page minute signed and dated at the time is worth far more than a reconstruction two years later during an enquiry.

Each shareholder receives a voucher showing the company name and number, the payment date, the shareholder's name, the number and class of shares held, the dividend per share and the total. Keep a copy with the company records.

The voucher is what the shareholder uses to complete their Self Assessment return.

Directors declare interim dividends during the year, and they can be varied or stopped. A final dividend is recommended by directors and approved by shareholders at a general meeting, and once approved it becomes a debt due to shareholders.

Owner-managed companies almost always use interim dividends, because they are flexible and can be aligned with reserves as they build.

Rates, thresholds and deadlines quoted here reflect the 2026/27 UK tax year. Check current GOV.UK guidance, or ask us, before relying on them for your own company.