Dividend Voucher Template

A dividend voucher is the statement a UK limited company issues to a shareholder when it pays a dividend. It shows the number of shares the payment has been calculated on and the amount payable.

For owner-managed and small private companies, the voucher is what a director-shareholder relies on when reporting dividend income on their self assessment return, and it is the evidence HMRC will look for if a payment is later challenged. Keep a copy with the board minutes that declared the dividend.

The terms "dividend voucher", "dividend confirmation" and "dividend certificate" are used interchangeably in practice.

Issue a voucher every time the company declares and pays a dividend, regardless of amount. Best practice is to issue it on the payment date, so the paperwork lines up with the money leaving the company bank account.

Under regulation 30 of the Model Articles for Private Companies, interim dividends are declared by the directors alone, with no shareholder approval needed. The board minutes are the formal act of declaration. Final dividends are recommended by the board and then declared by the shareholders by ordinary resolution, usually passed by written resolution in a small company.

Even where you are the sole director and sole shareholder, still produce a voucher for each payment. HMRC may ask for evidence years later, and missing paperwork is a common reason dividends are recharacterised as salary or as a director's loan.

Every shareholder who is paid a dividend should receive a voucher. This includes:

• Director-shareholders of an owner-managed company
• Family members or spouses who hold shares (including alphabet shares used to vary dividends between holders)
• External or minority shareholders
• Corporate shareholders such as a holding company or trust

Where shares are held jointly, the company is bound to pay the dividend to the first-named holder on the register (Model Articles, reg. 31), and the voucher should be issued in the same name. Keep a copy of every voucher issued. Shareholders will need theirs for self assessment, and accountants will request them at year end.

Paying without distributable profits. Section 830 of the Companies Act 2006 allows a dividend to be paid only out of profits available for distribution (broadly, accumulated realised profits less accumulated realised losses). Paying when there are none is an unlawful distribution, and the directors who approved it can be required to repay it personally.

Declaring against out-of-date accounts. The declaration must be made by reference to relevant accounts. Usually those are the last annual accounts. If they don't show enough profit, or you're in the first accounting period, you need interim or initial accounts that enable a reasonable judgement on distributable reserves.

Skipping board minutes. The voucher records the payment, but the board minutes (for an interim) or the shareholders' resolution (for a final) are what formally declare it. HMRC expects to see both.

Paying unequally within a share class. All shareholders of the same class must receive the same dividend per share. To pay different amounts to different holders, you need separate share classes (typically alphabet shares: A ordinary, B ordinary, and so on).

Late dividend waivers. A shareholder wishing to waive a dividend must execute the waiver as a deed before the dividend is declared (interim) or approved (final). Once declared, a dividend is a debt due by the company, and a later waiver does not avoid the income tax charge.

Backdating vouchers. The voucher date should match the actual payment date. Backdating to fit a different tax year is a common red flag in HMRC enquiries.