What is it?
A dividend voucher is a document given to shareholders when an interim or final dividend is declared by the company, to be used as evidence to document the payments received. They should be prepared and sent to each shareholder, for each declaration of a dividend, and must contain certain information. For more information on the importance of dividend vouchers, please see our briefing “Why are Dividend Vouchers Important?”.
Who is it for?
A voucher should be provided to every shareholder who receives a dividend payment, for every dividend declared. This applies to Private and Public Companies.
How does it work?
The primary use of dividend vouchers is their use as evidence of dividend income for tax reasons. In the event of a tax enquiry, HMRC can ask for an individual to produce evidence of their income and dividend vouchers are the primary source of evidence for income received from dividend payments. If they are unable to do so, HMRC may decide the income is not related to dividends, and there are tax implications as a result of this. Therefore, it is important that they contain the relevant information.
A dividend voucher must contain the below:
- Name and registered number of the company
- Name and address of the shareholder receiving the dividend
- The share class on which the dividend is being declared
- The amount of dividend to be paid
- The date of issue
- They must be signed by an officer of the company
It is normal for a dividend voucher to also include a reference to the number of shares held by the individual, particularly where the amount to be paid has been expressed as an amount per share instead of a total figure. Dividend vouchers will also typically state whether the dividend is an interim or final dividend.
What should I do next?
If you are in the process of declaring a dividend, you should also factor in that a voucher will need to be prepared for each shareholder. Critchleys are able to assist with this and can prepare these on your behalf. You should also retain copies of dividend vouchers in the company’s records, for use if an enquiry is opened by HMRC.
Please reach out to a member of our team to find out more about how Critchleys can help.
If you have any queries regarding the above or have any other questions, please do not hesitate to contact Charlotte Leslie on 01865 261119 or via email.
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