How often you can pay dividends
The frequency and practicalities of paying dividends - explained
There is no legal limit on how often a company can pay dividends. Monthly, quarterly or ad hoc are all fine, provided each payment clears the same two hurdles.
The two hurdles, every time
First, sufficient distributable profit: accumulated post-tax profit is required, after allowing for Corporation Tax liabilities that have built up but not yet been paid.
Second, the paperwork: board minutes and a dividend voucher for each payment. We can provide you with a template voucher and minutes, and will check you have all of them completed as part of your plan.
The risk of treating dividends as wages
A regular dividend feels like a salary, but it is not one. If profits dip, dividends must pause, because a payment made without sufficient profit is unlawful and repayable. This is why you need to keep a running view of your reserves.
💡 Good to know: Tell us the regular amount you would like to take. We can confirm if the company reserves look healthy enough to support it. We will then help you set up the paperwork cycle and give you guidance to ensure you can monitor the position on an ongoing basis.
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