How frequently can I take dividends?

Assuming there is retained profit after tax in the business, Directors can vote dividends whenever they like, annually, quarterly, monthly or even weekly.

Bearing in mind that dividends involve paperwork (the decision to vote dividend should be minuted and vouchers prepared), it is more practical to vote them less frequently rather than more frequently.

There is another reason why we would not recommend to vote them monthly. HMRC might regard monthly or weekly dividends as ‘disguised salary’ which has tax implications for NI and Income Tax. Whilst a clear audit trail of the dividend process being followed should eliminate this risk, we generally feel it is preferable to avoid attracting the suspicion.