Hi - I have just prepared my clients final year accounts to 31st December 2013 and the directors wish to pay themselves a dividend which is fine as there are profits after tax. I was under the assumption that I would (i) DR dividends (capital & reserves) and (ii) CR proposed dividend (current liability). However, I have just come across some documentation that suggests that for a dividend to be declared at year end it would have to have been approved by the shareholders before the year end. Is this correct?
My original problem was that when posting the declared dividend in the CT600, it was showing as 'Equity dividends paid' in the Profit and loss account note. The dividends haven't been actually paid yet though as the decision was only made recently.
I have just clicked on the note for box AC38 in the CT600 and that also says that "the dividends for the period field no longer include dividends that are proposed before the date of the approval of the accounts". So, it would appear that declaring dividends after year end is no longer an option?
Dividend has to be paid in the year to be included in the accounts. By paid mean paid in cash or credited to the directors loan account. Proposed dividends are no longer allowed.
Provided the dividend/minute paperwork is dated correctly then you can include it in the year if want.
