Recording Franked Investment Income

My business is also a shareholder in a 2nd business from which it receives dividends. How should these dividends received be recorded? I have initially recorded them as Miscellaneous Income but then they appear within the turnover figures on the profit and loss which surely is not accurate?

Many thanks in advance for your help.

This is Franked Investment Income:

(in the UK) income in the form of dividends paid to a company from earnings on which corporation tax has already been paid by the originating company.

There is no code for this on the default chart of accounts in QuickFile. I would recommend therefore creating a new nominal code in the Chart of Accounts section. You can call it something like “Investment Income”.

When your accountant completes your year-end formalities, they then need to isolate this income from CT calculations, this is why it’s important to have this posted to a dedicated nominal ledger and to advise your accountant of this income when the accounts are prepared.

Don’t forget to also retain a copy of your dividend vouchers.

Disclaimer: I am not an accountant so I would always recommend seeking a professional opinion.

Great thanks as always Glenn, a great help.

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