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Dividend scenario 7

Expenses paid by director personally

Let’s say you record a company expenses of office rent at £2000. You decide to pay for this out of your personal funds and the money comes out of your personal bank account.

Because Dividend amounts are calculated based on expenses recorded (not whether or how they are paid) the Maximum Dividend Available will be reduced by £2000 but your Company Bank Account will be unaffected and will show a balance £2000 higher than the maximum dividend available. Your Director’s Loan Account will still reflect the fact that you paid for the expense personally and the company will owe you that £2000.

This is part of a troubleshooting series on 'Why does the maximum dividend available not match my bank balance?'

Last Updated: 14 Sep 2015 11:15AM BST

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