How to declare a dividend: board minutes and vouchers

To declare a dividend, the directors confirm the company has enough distributable profit, hold a board meeting to approve the dividend, write minutes, and give each shareholder a dividend voucher. Then the company pays the money. Skipping the paperwork can turn a dividend into a director’s loan or an unlawful distribution, so it is worth doing properly every time.

Can my company pay a dividend?

Your company can pay a dividend only if it has enough distributable profit. Section 830 of the Companies Act 2006 says a company “may only make a distribution out of profits available for the purpose”, meaning its accumulated, realised profits less its accumulated, realised losses.

GOV.UK’s guide to taking money out of a limited company puts it simply: you must not pay out more than your available profits from the current and previous financial years. In practice, allow for the Corporation Tax due first. Dividends usually go to all shareholders in proportion to their shares.

Interim or final dividend?

Most small companies pay interim dividends, which the directors can decide alone. Article 30 of the model articles says the company “may by ordinary resolution declare dividends, and the directors may decide to pay interim dividends”.

A final dividend must not be declared unless the directors have recommended its amount. Check your own articles, because they may differ from the model articles.

How to declare a dividend: step by step

Follow these seven steps for each dividend.

1. Prepare up-to-date figures. Use management accounts or recent annual accounts to show retained profit after Corporation Tax. Our guide to reading a balance sheet shows where to find it.
2. Decide the amount per share. For example, £10,000 across 100 ordinary shares is £100 per share.
3. Hold a board meeting. A sole director can hold a meeting alone. GOV.UK says minutes must be kept even if you are the only director.
4. Write the minutes. Record the profit check, the amount, the payment date and the shareholders entitled.
5. Pass a shareholder resolution for a final dividend. This can be a written resolution. Interim dividends do not need one under the model articles.
6. Issue dividend vouchers. One per shareholder, with a copy kept by the company.
7. Pay and record it. Transfer the money on or after the payment date and post it to the dividend account, not to wages or the director’s loan account.

Board minute template

Copy this into your minute book and fill in the brackets.

• Company: [Company name] Limited, company number [number]
• Meeting: Board meeting held at [place or online] on [date] at [time]
• Present: [Director names]
• Accounts reviewed: The directors reviewed the [management accounts to date] showing distributable profits of £[amount] after allowing for Corporation Tax.
• Resolved: That an interim dividend of £[amount] per ordinary share be paid on [date] to shareholders on the register at [date], totalling £[amount].
• Signed: [Chair], [date]

Section 248 of the Companies Act 2006 says minutes of directors’ meetings must be kept for at least 10 years.

Dividend voucher template

GOV.UK lists four things a voucher must show: the date, the company name, the shareholders’ names and the dividend amount. A clear voucher also includes:

• company name and registration number
• date of payment
• shareholder name and address
• number and class of shares held
• dividend per share and total dividend paid
• signature of a director or the company secretary

Keep a copy and send one to each shareholder.

How much tax will the shareholder pay?

Dividends are taxed on the shareholder, not the company. GOV.UK’s tax on dividends page gives these 2026/27 rates on dividends above the £500 allowance.

Budget 2026 on 28 October 2026 kept these rates and the £500 allowance for 2027/28; see Budget 2026 for limited company directors.

Example. A director takes a £12,570 salary and £30,000 of dividends in 2026/27. The first £500 of dividends is tax-free. The other £29,500 falls in the basic rate band, so the dividend tax is £29,500 x 10.75% = £3,171.25, paid through Self Assessment. Run your own numbers in the dividend tax calculator.

What happens if a dividend is unlawful?

A dividend paid without enough distributable profit is unlawful. Under section 847 of the Companies Act 2006, a shareholder who knew, or had reasonable grounds to believe, the dividend broke the rules must repay it to the company. Directors who approve it may also be in breach of their duties. If money was taken without the paperwork, talk to your accountant about treating it as a director’s loan instead.

What to do now

• Check your articles for any dividend rules that differ from the model articles.
• Set up a minute book and a voucher template before your next payment.
• Compare the tax on salary and dividends with the salary vs dividends calculator.

Frequently asked questions

Do I need board minutes if I am the only director?

Yes. GOV.UK says you must hold a meeting to declare a dividend and keep minutes, even if you are the only director.

Do I send dividend vouchers to HMRC or Companies House?

No. You give a voucher to each shareholder and keep a copy with the company’s records. Shareholders use them to complete Self Assessment.

Can I pay dividends monthly?

Yes, if the company has enough distributable profit each time and you hold a board meeting, write minutes and issue vouchers for each payment.

What is the dividend allowance for 2026/27?

It is £500. Dividends above that, and above any unused Personal Allowance, are taxed at 10.75%, 35.75% or 39.35%.

Can a company pay dividends if it made a loss this year?

Possibly. It depends on accumulated realised profits, so retained profits from earlier years can cover a dividend even after a loss year, as long as the total stays positive.