Question about income tax on dividends
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  1. #11

    Should post faster

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    I siphon off the 7.5% every time i draw a dividend. Is this not common practice?

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    There is a slight caveat. In my case, HMRC collect my dividend tax through my PAYE code. So I don't need to make a POA payment in Self Assessment, because I am paying it in PAYE. HMRC estimate that my dividends will be the same in 2017/18 as they were in 2016/17 and base it on that. I can tell them if I think otherwise.

    The numbers are the same, of course. It just blunts the pain a bit.

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    Contractor Among Contractors

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    Quote Originally Posted by l35kee View Post
    I siphon off the 7.5% every time i draw a dividend. Is this not common practice?
    You'd be surprised, or maybe not. I have a separate bank account into which I stash money that I think I will owe HMRC but there are a lot of people who don't put aside even the VAT they collect (which was never theirs in the first place).
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    I live on CUK

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    Quote Originally Posted by l35kee View Post
    I siphon off the 7.5% every time i draw a dividend. Is this not common practice?
    Yes you should.

    You should have an account for bills like that preferably with a different financial institution. That way if you are overdrawn on your main account, the bank can't help themselves to that money.

    Btw It does happen
    "You’re just a bad memory who doesn’t know when to go away" JR

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