http://www.incauk.biz/ Hi, I'm Graham from Inca Chartered Accountants. If you are running a limited company one of the best ways to get money from that business is a share of the profits, which is known as a dividend. But how do you actually go about getting a dividend from your company? Well, in this video I'm going to explain how to work out the basis for a dividend, and the structure and pit falls of taking a dividend. Now profit of course is your sales less your costs less your wages. The next thing you have to take off is your tax bill which comes first. To be on the safe side we suggest that you put a quarter of your profit away for tax, three quarters of it is available for you to have as a dividend. So how do you go about getting a dividend from your company? Well, as with most things to do with limited companies it's all to do with paperwork. The first thing you need to do is hold a board meeting, because it is the board that declares the dividend. The second thing you need is know is a tax voucher which goes to your shareholders which tells them about the details of the dividend that they have received. So you've got your paperwork in order then you can just go and pay it. Make a bank transfer to each shareholder for the amount of dividends they are having. Don't lump it all together with salary and expenses. Make it separate payment, that way it's is clear that it is a dividend. If it looks like a dividend then it will be taxed like a dividend. If it looks like a salary then it might be taxed like a salary and that could end up with a 46% tax hit on you as a business owner. The last thing to remember about dividends is you can have them as often as you want. If you really want to have 365 dividends in a year and your profit allows it that's fine. A lot of minutes, a lot of tax vouchers but it's absolutely fine to go ahead and do it. In the next video I'm going to be talking about what you can claim against your business for tax purposes.