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How to record a director shareholder dividend

Fancy some visual assistance?
Watch our handy tutorial video for Issuing & Paying Director Dividends in Crunch.

Dividends are payments made to company shareholders from the profits of the company after corporation tax (profit after tax). Dividends are the most tax-efficient way to take your income after you’ve exceeded the National Insurance threshold and are accounted for between 6th - 5th April, each financial year.

  • This article will help you know how much you could take as a dividend.
Please note: If your company has shareholders who are not directors in the company, such as your partner, for instance, any dividends they take need to be recorded slightly differently and must completely separately from your own.

Start by navigating to the ‘Pay Yourself’ tab and the ‘Dividends’ sub-tab, then select ‘New Dividend’, as shown below:

We've got you covered by a quick clip below, which you can enlarge by selecting, or continue below for step-by-step instructions:

If you'd prefer step-by-step support, please continue below:

On the “New Dividend” form, start by entering the date of your dividend. Your Crunch account will automatically calculate the ‘maximum dividend available’ on that date, based on income, expenses, corporation tax, etc. as shown below, but if you click the "see calculation" button you'll be presented with details of how it's calculated: 

Next, enter the amount of dividend you wish to take. The “Dividend breakdown” form will appear underneath displaying the dividend amount for each shareholder, based on the number of shares held on the date chosen. 

However, if you're intending to pay this on the same day, or a director has already withdrawn/transferred the dividend from the business bank, you can quickly create "Director Withdrawals" here by checking the relevant ‘Create withdrawal’ checkbox:

Please note: If you only wish to issue dividends and not create the director withdrawal, you can now click ‘Save’ to record them. You should be aware that this will act as a “credit” on your Director Loan Account.

Clicking any of these checkboxes will populate the ‘Director withdrawals’ section of the form below and from here you simply have to enter the payment details of each withdrawal, or use the ‘Same withdrawal details for all director withdrawals’ to specify that all director withdrawals used the same “payment method”.

Whichever you choose, a director withdrawal will be created for each of the directors that had the ‘Create withdrawal’ box ticked.

Once you click ‘Save’, you’ll be taken to a list of “dividend vouchers” you’ve just created, with the option to download and/or email them to the relevant director shareholder(s).

Trying to pay a "Non-Director Shareholder Dividend"?

  • Non-Director Shareholder Dividends are recorded separately to Director Shareholder Dividends. These need to be logged correctly, and accurately, or it could cause problems. Please see here.

  Need some more help on "Director Withdrawals"?
  • Please see here for assistance with this.

Do you have a negative "Director Loan Account’" balance?

  • This can, more often than not, be caused by director withdrawals being recorded without the correct dividends issued with them. Please see here for guidance.

Still unsure? No problem! Take a look at our handy issuing & paying director dividends video:

Last Updated: 28 Oct 2019 10:29AM GMT
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