The dividend voucher
This article describes the dividend voucher and board minutes that FreeAgent generates for a dividend.
Whenever you record a dividend, either as a payment from the bank account or as a journal, FreeAgent will create a dividend voucher and board minutes for the dividend.
The company must, by law, have a meeting of the board of directors, check that there is sufficient profit in the company to allow for the dividend, and produce this paperwork, every time it declares a dividend, on a timely basis. This applies even if one person is the sole director and sole shareholder of a company.
Once the voucher and relevant board minutes have been created, you need to print them out, fill in the gaps in the minutes or add the voucher to your existing meeting minutes, and have them signed by the chairman, and keep them safely.
Please note that FreeAgent's dividend functionality is only available in the UK limited company account type. It won't be available if you have an unincorporated landlord, sole trader, partnership, UK LLP or non-UK account type, such as a universal or US account type.
Where do I find these in FreeAgent?
Navigate to the ‘My Money’ tab at the top of your screen and select ‘Dividends’ from the drop-down menu.
Select any of the transactions you see there.
The board minutes for the dividend and voucher appear.
The minutes to declare the dividend are at the top. There is, of course, information on these minutes that FreeAgent could not know, such as the names of who was present at the board meeting when the dividend was declared.
This dividend voucher is also called a dividend declaration, so don’t be concerned if you don’t see the word 'voucher'. You will need to print the voucher from FreeAgent and fill in the missing information from the minutes or add the voucher to the meeting minutes.
When you're ready to print and sign this paperwork, select 'Save As PDF' in the top-right to save the file to your computer.
You can then print it using a PDF viewer such as Adobe Reader or Google Docs.
Tax on dividends
From April 2016, new legislation regarding the taxation of dividends was introduced. It abolished the tax credits system and introduced a 0% allowance on a certain threshold of dividend earnings instead.
The rate you will pay on earnings above this threshold varies by tax band - you can find out more on gov.uk.
The voucher is important because the dividend needs to go on your personal tax return. FreeAgent can help you start working out your personal tax and it will put this dividend on to the Self Assessment return for you.