Example of "just and reasonable attribution of dividends to post-departure trade profits"

HMRC will accept any just and reasonable attribution of dividends to post-departure trade profits that accords with the facts If non-audited book-keeping (small company exception) states that the trading profit for the month of March 2023 was £5,000 and therefore the dividend of £5,000 was taken on 1st April 2023 (once the trading month was booked, and reconciled), is this considered "just and reasonable"? If it is not, what process should be used?

Hi,

It is up to the individual to decide what method to use to determine what is just and reasonable based on the facts. You will need to keep a record of how you came to the figure in case we ask for it.

Thank you.

In my view, it's totally reasonable to say "FreeAgent says the profit last month was £5,000 - so we took a £5,000 dividend the following month". Would you agree or disagree with that?