Going into higher rate dividend band

[TheCyclingProgrammer]

One thing to watch is that they won't just ask for the tax you owe, but tax for the next year too. So if you take a lot or you can end up in a tax death spiral. You have to declare extra dividends the next year to pay the tax that you wouldn't owe if you didn't have to declare the dividends to pay the tax in advance.

By Jan, you should have a good idea what your tax should be for the current tax year (unless you take dividends unexpectedly between Jan-Apr) so you can just reduce your payments on account to whatever you think they should be (it won't be nil anymore but most of us should only be paying a couple of grand in dividend tax if we stay basic rate payers, so half of that).

[Louisa@AardvarkAccounting]

Don't HMRC pay interest if you have paid more tax than is due?

I have a sneaking suspicion that you don't get early payment interest on payments on account. But HMRC are kind enough to refund any over-payments.

[Saint John]

Who pays the dividend tax?

If dividend tax is due on basic and/or higher rate tax, is this treated as a business expense and paid from the business account or, because it is part of your individual self-assessment, payable from my personal bank account?

Any help is appreciated.

[northernladuk]

I think you need to understand what you do a little better. Personal tax is a business expense? Really? :|

[handyandy]

If dividend tax is due on basic and/or higher rate tax, is this treated as a business expense and paid from the business account or, because it is part of your individual self-assessment, payable from my personal bank account?

Any help is appreciated.

It is NOT a business expense but if you were accounting for it under PAYE then it could be paid by your LTD as part of the PAYE and NIC's that they collect from you as an employee on behalf of HMRC. But it comes out of your personal gross pay and your LTD can only do this if HMRC have issued a notice of coding that includes it.

Otherwise it will come out of your personal bank account when you do you tax return at the end of the year and settle up anything you owe HMRC.

However, your accountant should be doing this for you if you have taken a payroll and personal tax return service from them. If you are having to ask these questions then you NEED to take those services from a qualified accountant.

HA

[Darren at Fox-Bartfield]

Self Assessment

If dividend tax is due on basic and/or higher rate tax, is this treated as a business expense and paid from the business account or, because it is part of your individual self-assessment, payable from my personal bank account?

Any help is appreciated.

A personal tax liability payable on investment income declared on a personal self assessment return should be paid from your personal bank account.