Hi. I have made a dividend payment to my partner and I (all minuted, sufficient funds etc) but am not sure how to “correctly” show this in the accounts. I made the payment and then tagged the transaction from the current account statement upload as “Dividends Paid” (3102) and each payments shows up as a debit. Do I need to create a journal entry for the dividend payments too, to create a matching credit, or is that covered by tagging the payments?
Thanks in advance
I’m not 100% sure about dividends as I’m a sole trader, but have you followed the process as per this post?
I have. But then when I look at the account detail for 3102 there is the value of the dividend payments in the debit column, but nothing in the credit column. I thought they always had to balance, so assume that some sort of journal entry is still needed?
The accounts themselves don’t need to balance, because if you are debiting the dividend account, you are crediting the bank account for the same value (therefore - they balance).
The important thing is, and QF will sort this for you, is that the total columns should balance. For example, in my test account I see this:
But, in my General Purchases (5000) account for example, I have these totals:
In terms of shorting another journal or anything, as I said, I don’t do dividends, so can’t say for certain. But maybe someone like @FaradayKeynes may be able to advise you further.
If you are actually paying dividends from bank then tagging dividends to 3102 Dividends Paid is all you need to do. If you are just declaring but not paying then journal would be required
Just a little reminder that the full paperwork will be required to hand if an inspection was to happen.
Does the Dividend tax come under Corporation Tax or Income Tax?
Should the tax credit be shown on Quickfile or would it be calculated for tax purposes?
The dividend tax credit is not needed on Quickfile and will only show up on the dividend vouchers and personal tax return.